Tesla Inc. stock rose nearly 2% on Wednesday ahead of the electric-vehicle maker’s stock split at market close.
The EV maker’s board approved the split on Aug. 5 and detailed the proposal to split on its proxy in June, saying it would provide more flexibility for its employees managing their equity and serve as a recruiting tool.
Tesla’s 3-for-1 stock split will be its second in as many years; the company split its shares 5-for-1 in August 2020. Tesla began trading on its split-adjusted basis on Aug. 31, 2020, and the shares have gained about 104% since then.
The company first unveiled the plans to enable the 3-for-1 split, which hinged on shareholders’ approval of an increased share count, in late March, with the stock shooting up 8% at the time.
After Wednesday’s close, Tesla stockholders will receive a dividend of two additional shares of common stock for each share they already held.
The stock is down 14% so far this year, compared with losses of around 13% for the S&P 500 index.