The company of tech billionaire Elon Musk announced on Friday after the US market close that its board of directors will agree to a three-for-one split if approved by shareholders at the upcoming AGM. Tesla had already announced in March that it was planning a split. But it was unclear in what proportion.
Stock splits don’t actually change a company’s stock market value, but they do lower the price per share. The papers can thus become more attractive, especially for small investors, even if many brokers already offer to buy shares proportionately. Nevertheless, the measure is very popular with companies: This year other large US companies such as Google’s parent company Alphabet and Amazon also announced stock splits.
Tesla’s shares had recently come under a lot of pressure in the general downturn on the stock markets. The price has fallen more than 40 percent since the highs of last November. Tesla shares closed at $696.69 on Friday. The announcement of the share split initially caused slight price gains after the trading session. Tesla also announced in the announcement that Oracle founders Larry Ellison would like to give up his position on the board of directors.
RBC lifts Tesla to “Outperform” – target $1,100
Canadian bank RBC has upgraded Tesla to “Outperform” from “Sector Perform” but lowered its price target to $1,100 from $1,175. According to a study available on Monday, analyst Joseph Spak is very optimistic for the electric car manufacturer in the short term. Quite low delivery expectations offer potential for surprises in terms of profitability in the second quarter.
Tesla shares were temporarily down 2.52 percent at $679.14 in premarket NASDAQ trading on Monday.
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