Tesla split its stock after market close on Aug. 24 and will start to trade on a 3-for-1 split-adjusted basis. The split, announced in March and approved by shareholders at this year’s annual meeting earlier this month, sent the shares up 2% in pre-market trading on Aug. 25.
The split would enable more investors to afford to invest in Tesla and broaden the company’s audience and reach.
Wedbush Securities said in a note sent to GOBankingRates that it is adjusting its pre-split $1,000 price target — or $333 post split — to $360 “reflecting the 3:1 split as well as improved production from Tesla out of its key China Giga factory during the September quarter with clear momentum heading into year-end.”
Wedbush also maintains its Outperform rating on the stock.
“Demand is not the problem for Tesla, but supply has been and is now clearly on an upward trajectory with China on its next level of Model Y production while Berlin and Austin ramp its production lines into year-end,” Wedbush analyst Dan Ives wrote in the note. “For 2023 we believe 2 million deliveries potential and massive production capacity will be a significant advantage for Tesla in this EV arms race with competition coming from every angle and geography.”
In June, Tesla said in a Securities and Exchange (SEC) filing that its “success depends on attracting and retaining excellent talent, not only through providing a respectful, safe, inclusive and equitable workplace, but also through offering outstanding benefits and highly competitive compensation packages.”
It added that since its previous stock split (in Aug. 2020) to June 6, 2022, its stock price had risen 43.5%.
“We believe the stock split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value. In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the stock split will also make our common stock more accessible to our retail shareholders,” according to the filing.
The Wall Street Journal reports that shares of Tesla have soared 28% since the split was announced, but are down 16% this year overall.
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