Tesla prepares for stock split again

Shares in Elon Musk’s electric carmaker surged on the update while the Covid-positive billionaire says he is ‘giving serious thought’ to creating a new social media platform.

Shares in Tesla have surged after news of a stock split. Picture: Scott Olson/Getty Images/AFP

Tesla will request shareholder approval at its annual meeting for an increase in the number of shares of the electric car maker to enable a stock split, though didn’t specify when such a split would take place or what the ratio of shares would be.

Tesla added $US81.20, or 8 per cent, to $US1091.84 after the update.

The move comes after Amazon.com this month said it would split its stock 20-for-1.

Google parent Alphabet said on February 1 that it will enact a 20-for-1 stock split.

Stock splits change the stock price, not the total value of an investor’s holding, although they have a history of generating a short-term rally in a company’s stock price.

The proposal comes almost two years after Tesla enacted a 5-for-1 stock split as shares of the company run by Elon Musk.Tesla, at the time, said it was making the move “to make stock ownership more accessible to employees and investors”.

Tesla shares surged last year as the company’s vehicle deliveries rose strongly despite global supply-chain constraints, and its profit advanced, too.

The rally has turned Mr Musk into the world’s richest person according to the Bloomberg Billionaires Index.

The stock is down around 4 per cent this year amid wider market turmoil following Russia’s attack on Ukraine that began last month but are up more than 60 per cent over the past year.

Tesla’s stock-split announcement comes as the company is temporarily idling its factory in Shanghai amid wider Covid-19 lockdown measures in China.

Mr Musk on Monday also tweeted he has again tested positive for the virus.

In another tweet, he said he “giving serious thought” to creating a new social media platform, without disclosing specifics.

He was critical of Twitter in several tweets in recent days.

He polled his followers for their thoughts on whether the social network adheres to free-speech principles, and said he would give serious thought to building a new platform.

“Free speech is essential to a functioning democracy,” he tweeted.

“Do you believe Twitter rigorously adheres to this principle?”

In the accompanying poll, 70 per cent of the more than 2 million respondents voted no.

“The consequences of this poll will be important,” Mr Musk said in a follow-up tweet.

Twitter declined to comment. The company says on its website that “defending and respecting the user’s voice” is a core value.

- With Allison Prang

The Wall Street Journal