Shares of Tesla Inc. surged more than 7% in the extended session Tuesday after the Silicon Valley car maker’s board approved a five-for-one split of the company’s stock.
The move was geared to “make stock ownership more accessible to employees and investors,” the company said. Tesla TSLA, -3.11% shares have more than tripled so far this year.
Each shareholder of record as of Aug. 21 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after the close on Aug. 28, Tesla said.
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Trading on a stock split-adjusted basis will begin on Aug. 31, it said.
Tesla shares have gained 229% this year, compared with gains around 3% for the S&P 500 SPX, -0.79% , and are up 485% in the past 12 months, compared with a 14% advance for the S&P in the same period.
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The shares have hit a string of closing records, most recently July 10’s $1,544.65 close.
Tesla twice this year surprised investors with a quarterly profit when Wall Street called for a loss; its second-quarter earnings, its fourth consecutive quarter of GAAP profit, put it on track to join the S&P 500.
The inclusion, expected to happen within a few months, would unleash a torrent of new money from countless exchange-traded funds, and be followed by pension, mutual and other actively managed funds in the U.S. and overseas, that track the large-cap benchmark or have size or other restrictions on which stocks to add to their holdings.
Besides Tesla’s profitability, several analysts have praised Tesla’s cash reserves, the continued strong demand for its electric vehicles, its new factories being built in Texas and in Germany, and a “battery day” scheduled for Sept. 15 as well as the expected launch of the Cybertruck, its electric pickup.