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Share split: every Tesla share is divided into fifths

2020-08-12T09:06:58.247Z


The company now thinks that Tesla shares have become too expensive. Therefore, the shares are divided into smaller units. First reaction: Tesla shares are getting more expensive.


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Tesla Model X in front of Moscow's financial center

Photo: EVGENIA NOVOZHENINA / REUTERS

The US electric car maker Tesla has announced a share split. Shareholders received four more share certificates as dividends for each paper, the company announced on Tuesday. This should enable more employees and investors to become shareholders. The procedure should take effect on August 31.

A stock split does not seem to change the company value, but it automatically lowers the price of the individual share. However, this then only has a smaller share in the company. Since this can increase buying interest, offshoots reacted happily and drove the Tesla price up in after-hours trading by almost 6 percent to more than $ 1,450.

Two weeks ago, Apple had also announced a 1: 4 stock split - the fifth in the history of the stock market star. The share price of the iPhone manufacturer has risen 14 percent since then, Apple has replaced Saudi Aramco as the company with the world's highest corporate value.

For Tesla, it is the first division of the share since the electric car pioneer went public in June 2010 at a price of 17 dollars per share. Since then, the company's value has grown by a factor of 86. The current rate is converted to the new shares after the split, i.e. divided by five, $ 290. The price of the undivided share was still that high in October 2019.

The run has already paid off for Elon Musk

This year alone, Tesla's share price tripled and market capitalization reached $ 270 billion. With this, the company puts all conventional car manufacturers in the shade.

So far, the Californians have just sold 90,000 vehicles and six billion dollars in revenue per quarter. The high market value stands for the expectation that Tesla will not only leave its notorious production problems behind, but will also conquer the mass market from the luxury niche.

After all, the company, which posted high losses for years and continues to expand aggressively, has recently posted a profit for four quarters in a row. The bottom line since spring 2019 was $ 368 million. At this rate, a shareholder would have to wait 734 years to recoup the price paid for her shares through profits.

For the eccentric CEO Elon Musk (49), the latest run has already paid off. Since May, two targets have been reached for the manager's record compensation, which is now $ 3 billion.

ak / dpa-afx / ap

Source: spiegel

All news articles on 2020-08-12

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