SPECIAL REPORTThe Top 7 Stocks for 2024
Tesla's last stock split was a success for investors and the company
BySamuel O'Brient, InvestorPlace ReporterMar 29, 2022, 1:16 pm EST
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Does Tesla (NASDAQ:TSLA) stock pay dividends? Not typically. However, with news yesterday that the company is planning another stock split, this question is top of mind.
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TSLA Stock Dividend History
Importantly, Tesla does not pay out any standard cash dividends to shareholders. In fact, it makes its positioning on this matter clear. Its website states that it does not anticipate ever issuing such a dividend, because it “[intends] on retaining all future earnings to finance future growth.”
However, there is a reason that investors are curious about Tesla dividends now. That is because when the company enacted its last stock split in 2020, it carried out a dividend payout. In the 5-for-1 stock split, each shareholder received an additional four shares for everyone one they held. The company said this was a way to make shares more accessible to employees and investors.
In this case, the dividend payout was the additional four shares. The main impact of this was that the stock split diluted shares.
After the stock split, however, TSLA stock took off. Shares have more than doubled since Tesla last split its shares.
Now, investors want to know what the new proposed stock split will mean.
The Upcoming Stock Split
Tesla has not revealed many details around the potential 2022 stock split, which still needs shareholder approval. We do know that the proposal will come to a vote at its next annual meeting, which is likely to take place in June. In the meantime, investors must wait for the release of its proxy statement. According to the 8-K filing, this document will include all necessary information.
One thing that the filing makes clear is that Tesla wants to issue another stock dividend. As it states, the company is seeking shareholder approval “in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”
Its last stock split worked well for both investors and the company. Now Tesla needs to open itself up to new groups of investors, and another stock split makes perfect sense.
What Comes Next
Until Tesla releases its proxy statement, all investors can do is wait and watch closely. If shareholders do approve a stock split proposal, it is likely that TSLA stock could rise again.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.comPublishing Guidelines.
Article printed from InvestorPlace Media, https://investorplace.com/2022/03/does-tesla-tsla-stock-pay-dividends/.
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