Shares of electric vehicle maker Tesla rallied in after-hours trading Thursday as the company won shareholder approval for a 3:1 stock split, the second such move in around two years, as the world’s most valuable automaker looks to make its stock more affordable.
In a widely expected move, Tesla shareholders approved the company’s proposed 3:1 stock split, causing shares of the company to continue rallying in after-hours trading following a 0.4% gain earlier in the session.
Tesla first announced the proposed 3:1 stock split in June as a way to make the $925 stock more affordable; based on today’s closing price the new share price would be around $308.
Though the stock is down roughly 20% this year amid the wider market selloff, billionaire Elon Musk’s electric vehicle maker has still seen its shares surge more than 200% since the last stock split in August 2020.
Stock splits don’t impact a company’s market value, but evidence suggests that by making shares more affordable to retail investors, the move does often provide a short-term boost to share price.
Tesla shares are up over 30% since announcing the 3:1 split in early June, while news of Tesla’s 5:1 stock split roughly two years sent shares over 70% higher in the 20 days following the announcement.
Several other major tech companies have announced stock splits this year and saw subsequent spikes in their share price; Google-parent Alphabet’s split 20:1 in February and Amazon’s stock split 20:1 split one month later.