Tesla Inc (NASDAQ:TSLA) shares rose after it emerged that boss Elon Musk and the board were planning a stock split.
The split of the common stock would be in the form of a 'stock dividend', according to a regulatory filing to the US Securities and Exchange Commission (SEC), meaning shareholders would be given an extra share or shares in order to dilute the share price.
Directors have approved a management proposal, which will be put before shareholders at the upcoming 2022 annual meeting.
The stock was up 4.5% to US$1,056 in pre-market trading on Monday.
Tesla's last 5:1 stock split came in August 2020, since when its share price has doubled again.
"We view Tesla's move following the likes of Amazon, Google, Apple and initiating its second stock split in two years as a smart strategic move that will be a positive catalyst for shares going forward," said broker Wedbush.
As in 2020, when Tesla followed Apple in spitting its stock, again Musk's move comes just after Amazon announced a 20-for-1 split.
Reducing the price of each share is purported to make them easier for small shareholders to buy, as well as a sign of management’s confidence in future market gains.
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On Friday, a US federal judge authorised the SEC to distribute over US$40mln to shareholders that had been collected from Tesla and Musk in 2018 as part of a settlement over claims the CEO had defrauded investors by tweeting that he had "funding secured" to take Tesla private.
Musk, who was forced to relinquish his role as chairman of the company as part of the settlement, recently accused the SEC of ignoring its "court-ordered duty" by waiting over three years to make the payout to investors.