Tesla officially announced that the first stock split in two years was imminent, and the stock price jumped after the market, once rising more than 2%

Tesla plans to discuss the proposal for a three-for-one split at its shareholder meeting in early August, saying the board supports the split. In the five months following the 2020 stock split, Tesla shares have risen nearly 80%.

According to regulatory filings released by the U.S. stock market after hours on Friday, June 10, Eastern Time, Tesla plans to discuss and approve the proposal for a stock split at its shareholder meeting on August 2. The file says:

“The main purpose of the Authorized Share Amendment is to promote the split of one share of our common stock into three shares in the form of stock dividends. As of June 2, 2022, our company has a total of 1,036,390,569 ordinary shares in circulation, and the current authorized common stock is 2 billion, which is enough to effectively hold shares. Our board of directors intends to approve the stock split, and only requires shareholders to approve the amendment to the authorized stock.”

After the announcement of the specific stock split plan, Tesla’s stock price, which closed down more than 3% on Friday, quickly turned up after the market, and once rose more than 2.5% after the market.

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If the stock split proposal passes, it would be Tesla’s first stock split since Aug. 30, 2020. Judging by the stock price reaction on Friday, the market was clearly expecting shareholders to approve the split.

After the 1:5 stock split in 2020, Tesla shares have surged nearly 80% in five months. On March 28 this year, the day it first disclosed its planned shareholding, Tesla’s stock price jumped 8%.

Stock splits are often accompanied by stock price increases. Recent stock splits by tech giants have also boosted their stock prices. For example, Amazon, which took effect on a 20-share split at the beginning of this month, rose by more than 6% in the week before the stock split took effect and in the week ended June 3. However, Tesla’s stock split coincides with the Fed’s vow to aggressively raise interest rates to suppress high inflation. Technology stocks are the first to be hit hardest. Tesla’s stock price may not be able to enjoy the dividends of stock splits as in the past.

This week, Amazon failed to withstand the prospect of aggressive rate hikes by the Federal Reserve. On the day it was announced that the U.S. CPI growth rate exceeded expectations and hit a 40-year high, Amazon’s stock price fell more than 5% in one day on Friday, and fell more than 10% for the week, ranking first among blue-chip technology stocks. Tesla fell nearly 1% this week, the smallest of all declines.

Tesla also disclosed in filings on Friday that its director Larry Ellison will step down. Ellison decided this month that he would not continue as a director when his personal term expires at the 2022 annual general meeting.

Tesla’s board currently expects fewer board seats after Ellison’s term expires, so applications for more than two board seats may not be submitted.

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