The electric vehicle maker Tesla announced a 5-1 ratio share split on Tuesday, which translated into the prices of its stocks skyrocketing at 7% in the extended trading hour.
Now, the company stands as the highest-priced stocks among the peers and on Palo Alto and the Wall Streets. Post the announcement, it traded at $1,475. The company wished to make shares more obtainable to traders, investors and employees, and with that intent, it took the decision, said a press release.
Interestingly, in the past year, the company has witnessed a massive turnaround in its fortunes with the price of shares spiking more than 200 per cent. In the same fray, two other car manufacturers, Ford Motor and General Motors have to shoulder losses following the pandemic effect.
Tesla would accord four extra shares for one to the shareholders recorded on August 21. They’ll receive by the end of trading on August 28. The split adjustment would begin on August 31.
Notably, the split by Tesla is an emulation of Apple Inc. that announced a similar stock-split in July this year.
Meanwhile, the California based automobile maker had posted the profits in its second-quarter results. The robust demand of its cars led to negate the impact of shutdowns of its plants due to Covid-19.