Because Tesla splits shares, while pushing on productivity and autonomous driving
Tesla after the close of trading on Wednesday aims to rally on the stock market with the share split: each investor will earn two additional shares. But Elon Musk's real goal is to increase production, in China and Europe
The volcanic Elon Musk is still moving, provided he can stand still. The 3 to 1 split to divide the share price of the automaker is in full swing in these hours. This means that those who had 10 shares before the share split will have 30 shares in their portfolio at one third of the previous price.
TESLA TESTS THE BOOST IN ITS MOST DIFFICULT YEAR
The decision came in the probably most difficult year for the company, which so far has suffered less than its rivals the perfect storm that has been unleashed on the entire automotive sector, including a lack of chips, skyrocketing mineral prices, renewed tensions. between East and West and even new lockdowns in Chinese factories, where the House of the electric car today has in fact the pivot of its production. Tesla then added problems of his own to the picture, already leaden in itself, including the quarrel between Musk and Twitter and the heavy investments in the last two gigafactories, Berlin and Austin, which at the moment only represent expenditure items in corporate balance sheets.
It is not surprising, therefore, if since the beginning of the year Tesla shares have left a full 18% on the field and there is of course uncertainty with reference to the near future, given that the situation, at a macroeconomic level, is quite unstable. And the announcement, issued last June 10, to proceed with the split of the Tesla coupons was not surprised either. Indeed, the stock has gained around 25% since then. The go-ahead from the shareholders had arrived during the annual meeting of 4 August while the following day the details of the maneuver were published.
MEGACAPS ATTRACT SMALL INVESTORS
It is not even the first time that Tesla has resorted to splitting: it had already done so two years ago, with a decidedly more massive split, of 5 to 1. In the following twenty days it had risen by 70%. And given that the technique, it is now proven, allows to obtain more or less significant boosts immediately, it is not even the only megacap to exploit it: other giants such as Amazon, Apple, Alphabet and GameStop also use it regularly. After all, stock splits do not affect the market value of the listed company that uses them, but they undoubtedly make the shares more attractive for retail investors.
OBJECTIVE: TO CHOOSE MORE AND MORE EV CARS
But in the meantime, Tesla first of all wants to proceed on two fronts, to shield itself from immediate and future risks. First, increase the production of its plants, pretending that the chip crisis does not exist. It recently refurbished its Shanghai plant, which with 99.99% of Chinese employees and over 95% of locally sourced materials and components immediately became the true hub of its global chain. Inaugurated in January 2019, on Saturday 13 August it produced the millionth EV car. Held by lockdowns, it was promptly upgraded to reach new levels and not lose ground.
At the same time, the third shift should arrive at the Brandenburg plant by the end of 2022. Currently, the gigafactory on the outskirts of Berlin is active from 6:30 in the morning until 22:30, but in the last quarter it would turn out cars 24 hours a day. Under this regime we should reach the number of 5,000 cars produced each week which, as you may recall, was the quantity indicated by Drew Baglino , Tesla vice president, during the last session for the financial results.
And then of course Tesla continues to press for more and more governments around the world to open up to automated driving , a sector in which the company has historically invested a lot (and which places it, of course, under the light of the road safety control authorities. ). For this reason, the Software Director of Tesla's Autopilot division, Ashok Elluswamy , recently stated that, according to the company's internal data, the AI that governs the car is able to prevent about 40 accidents a day, for example by understanding when you are pressed the accelerator pedal by mistake, instead of the brake.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-tesla-splitta-le-azioni-mentre-spinge-su-produttivita-e-guida-autonoma/ on Thu, 25 Aug 2022 10:18:39 +0000.