How Will Another Tesla Stock Spilt Impact Retail Investors?

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Posted on EVANNEX on May 03, 2022, by Zachary Visconti

As Tesla prepares for another stock split, analysts are pondering what to expect from retail investors. At the same time, many retail investors are also wondering if it’s worth upping their portion of the automaker’s shares before the stock split.

Tesla’s impressive first-quarter earnings and overall valuation could trigger another surge in retail investors ahead of an upcoming stock split, according to The Motley Fool. Tesla’s growth compared to auto industry standards has the automaker valued at around 4.4 times the market capitalizations of General Motors, Ford and Volkswagen combined — and it’s growing still.

In its first-quarter earnings results, Tesla posted $16.86 billion in revenue, representing an 87-percent increase year-over-year. Net operations cash flow surged by 143 percent to almost $4 billion, and the automaker produced 305,407 vehicles and delivered 310,048 total, with these figures jumping by around 69- and 68-percent, respectively.

Last month, Tesla shared a question forum for investors to ask and vote on questions prior to the Q1 earnings call using the platform Say Technologies, and the top question was regarding the stock split with 6,900 upvotes.

It isn’t yet clear at what ratio a stock split would occur, though it was one of many questions left unanswered on the forum.

Tesla filed an 8-K with the Securities and Exchange Commission in late March, and it said it would likely seek shareholder approval to increase the authorized share capital to make room for an upcoming stock split, as reported by Benzinga ahead of the company’s Q1 earnings call.

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