After missing a critical regulatory deadline, Tesla left its devoted following of retail investors in the dark about preparations for a forthcoming stock split.
In late March, the firm announced that its board of directors will seek shareholder permission for its second split in two years, but did not provide a specific ratio. Instead, it pledged that further information would be included in its “definitive proxy statement,” which is effectively the agenda for an impending annual meeting.
However, the SEC’s mandated time limit for filing expired over the weekend, leading Tesla to warn that it would require an extension.
$TSLA has filed a 10-K/A this morning that it will delay filing its 2022 proxy statement past the 120 day deadline from year-end, which would have been today. So any stock split will be delayed. pic.twitter.com/HjX4A3Uhfy
— Gary Black (@garyblack00) May 2, 2022
The delay, which comes so soon after Elon Musk’s $44 billion Twitter proposal, reignites an ongoing argument about whether Musk is overextending himself.
Apart from retweeting Tesla’s formal announcement that the AGM will be held on August 4, the workaholic CEO has been focusing his recent social media tweets on the broader political consequences of his high-profile takeover.
According to a Reuters article citing informed sources, Musk is currently in talks with significant financial groups and high-net-worth people about increasing funding for his Twitter transaction in order to tie up less of his personal riches. He sold 9.64 million shares worth approximately $8.5 billion last week to help fund his goals for the social media site.
Details on the stock split, which does nothing but visually lower the price of each share, are critical for many because Tesla is primarily popular among individual investors.
Vanda Research called it one of the top 10 small shareholder favorites, with Apple, Chinese EV manufacturer NIO, data miner Palantir, and meme stock AMC Entertainment.
Portfolio managers, on the other hand, often pay little attention to stock splits because they have no direct impact on a company’s underlying fundamentals or valuation.
According to Nasdaq data, institutional investors own only approximately 42 percent of Tesla, compared to 78 percent for Meta, another mega-cap tech business with a dominating shareholder as its CEO.
Much of this is due to Tesla’s exorbitant price-to-earnings multiples, which have attracted big-name short sellers like Kynikos Associates’ Jim Chanos, Greenlight Capital’s David Einhorn, and The Big Short’s Michael Burry.
Tesla trades at a very aggressive 73 times consensus 2022 expectations at its current price of $902.94. It is expected to open approximately flat on Tuesday, in line with small advances in Nasdaq futures.
The stock split would be the second for the EV pioneer. In August 2020, the corporation issued four new shares for every existing one owned by investors.
Much of this is due to Tesla’s exorbitant price-to-earnings multiples, which have attracted big-name short sellers like Kynikos Associates’ Jim Chanos, Greenlight Capital’s David Einhorn, and The Big Short’s Michael Burry.
Tesla trades at a very aggressive 73 times consensus 2022 expectations at its current price of $902.94. It is expected to open approximately flat on Tuesday, in line with small advances in Nasdaq futures.
The stock split would be the second for the EV pioneer. In August 2020, the corporation issued four new shares for every existing one owned by investors.