Tesla is splitting its elevated shares in a 5-for-1 exchange, a move timed to make the stock price less expensive for individual investors after a recent run-up in valuation making it the world’s largest automaker by market capitalization. Its shares surged on the news in aftermarket trading.
The Silicon Valley electric-car manufacturer said Tuesday each shareholder of record on Aug. 21 will receive a dividend of four additional shares of common stock for each then-held share. It will begin trading on a split-adjusted basis on Aug. 31.
Tesla has been a favorite stock for day traders and other retail investors, who have helped boost the shares to record highs. At one point last month, nearly 40,000 Robinhood account holders added shares of the automaker during a single four-hour span. That helped spawn a boom in shares of other electric-car companies — even those that have yet to actually produce a vehicle.
At their peak, the shares on July 20 hit a closing high of $1,643, more than quadruple a low in March of $361.22. In aftermarket trading Tuesday, Tesla rose as much as 8.4% to $1,490.