March 28 (Reuters) – Tesla Inc (TSLA.O) The electric car maker said on Monday it will seek investor approval to increase the number of its shares to enable a stock split in the form of a dividend, sending its shares up about 5%.
The plan came as the company halted its Shanghai factory amid COVID-19-related lockdown measures, and the head of artificial intelligence took leave as the company aims to achieve full autonomous driving capability this year.
The proposal, first announced on Twitter, has been approved by the board of directors and shareholders will vote on it at an annual meeting. If a stock split is approved, it will be the latest after a five-for-one split in August 2020 that made Tesla shares cheaper for its employees and investors.
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After the pandemic-induced surge in tech stocks, Alphabet Inc (GOOGL.O)Amazon.com Inc (AMZN.O) and Apple (AAPL.O)Also, in the recent past, they split their shares to make it more affordable.
Since the stock split in 2020, it has risen 128%, increasing the company’s market capitalization above $1 trillion and making it the largest US automaker by that measure.
“(The stock split) could further fuel the bubble in Tesla stock that has been brewing for the past two years,” said David Trainer, CEO of investment research firm New Constructs.
Tesla has delivered nearly one million electric vehicles annually, with production ramping up with new plants in Austin and Berlin amid COVID-19-related disruptions and increased competition.
Model Y cars are pictured during the opening ceremony of Tesla’s new Giga electric car plant in Gruenheide, Germany, March 22, 2022. Patrick Bloll/Paul via Reuters
Tesla on Monday notified its suppliers and workers that its factory in Shanghai, China, would be closed for four days as the financial center said it was closing in two phases for mass COVID-19 testing. Read more
Tesla CEO Elon Musk said Monday he was “supposed” to have tested positive for COVID-19, just days after attending a car delivery event at the company’s new plant in Berlin.
“We think the Berlin rally, Minicar and India are on the horizon, and we agree with the timing,” said Craig Irwin, an analyst at Roth Capital, hinting that companies usually split stocks when the good news comes.
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Musk also said Sunday that Andrei Karpathi, head of artificial intelligence at Tesla, was on vacation for a fourth month, at a critical time when Musk wants to achieve full self-driving capability and launch a prototype of a humanoid robot this year.
“Especially excited to get focused time to refine my technical edge and train some neural networks!” Carparthy tweeted.
“Although I already miss all the bots and GPU/Dojo combinations and look forward to having them handy again,” he said, pointing to Tesla’s Dojo AI chip.
Musk said in a January podcast interview that Karpathi played an important role, adding, “People will give me a lot of credit and they will give Andre a lot of credit.”
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Additional reporting by Nivedita Balu and Akash Sriram in Bengaluru and Hyungu Jin in San Francisco; Editing by Magu Samuel, Aaron Coeur and Bernadette Baum
Our criteria: Thomson Reuters Trust Principles.
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