Stocks opened higher Tuesday evening, after a choppy session earlier sent the S&P 500 within striking distance of a record close before the the blue-chip index lost steam and declined.
(Bloomberg) -- Tesla Inc. is splitting its elevated shares in a 5-for-1 exchange, a move timed to make the stock less expensive for individual investors after the company become the world’s most valuable automaker. Its shares surged on the news in aftermarket trading.Each shareholder of record on Aug. 21 will receive a dividend of four additional shares of common stock for each share, the Silicon Valley electric-car manufacturer said Tuesday. Trading will begin on a split-adjusted basis on Aug. 31.The split is a timely decision to capitalize on Tesla’s recent surge, which has pushed its valuation to around $256 billion, surpassing the value of Ford Motor Co. and Toyota Motor Corp. combined. With a price as as high as $1,643 in recent weeks, the shares are beyond the reach of many smaller stock investors just as the EV industry is capturing their imagination.“At a time where the appetite for the stock and overall EV story continues to gain momentum, I think it’s a smart move,” said Dan Ives, an analyst at Wedbush who rates the shares the equivalent of a hold. Tesla’s move follows a similar split by Apple Inc., which Ives said other tech giants are likely to emulate.Apple announced a 4-for-1 stock split after the close on July 30 and retail traders have piled in to bet on further gains.More AccessibleTesla has been a favorite stock for day traders and other retail investors, who have helped boost the shares to record highs. At one point last month, nearly 40,000 Robinhood account holders added shares of the automaker during a single four-hour span. That helped spawn a boom in shares of other electric-car companies -- even those that have yet to actually produce a vehicle.Credit Suisse analyst Dan Levy said in a note to investors that the split makes the shares more accessible to both retail investors and Tesla employees, noting the high stock price “may have been a barrier for retail” investors.At its peak on July 20, Tesla’s stock price was more than quadruple a March low of $361.22. Some of those gains came amid speculation the automaker is likely to join the S&P 500 after it reported the latest in a string of profitable quarters, a status that would make it a true blue-chip and a must-buy for mutual and exchange-traded funds that seek to mimic that benchmark index.In trading after the market close on Tuesday, Tesla rose as much as 8.4% to $1,490.The timing of the split may have come as a surprise to close followers of Tesla Chief Executive Officer Elon Musk’s Twitter feed. He was asked on June 30 whether he had any thoughts about a Tesla stock split and said it was worth discussing at the company’s annual meeting, which isn’t until Sept. 22(Updates with analyst comments from fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. says hedge fund Cable Car Capital LLC, which is shorting the company’s stock, is funding a former employee’s allegations that the company smeared him by accusing him of sabotage and stealing sensitive information.The carmaker said in a filing Monday that Martin Tripp’s 2018 counterclaim against Tesla was being funded by Cable Car, even though Tripp has said under oath that he had no financing or connection to Tesla short sellers.Cable Car portfolio manager Jacob Ma-Weaver had no immediate comment.Tesla on Tuesday persuaded a judge to issue an emergency order forbidding Tripp from further publicizing confidential information. Tripp has disclosed volumes of Tesla’s confidential documents, deposition transcripts and filings in his posts on Twitter, YouTube and Google Drive, Tesla said in federal court in Reno, Nevada.“Tripp has no excuse,” Tesla said. “He is fully aware of his confidentiality obligations and is openly flouting them. And he has a ready source to pay any monetary sanctions, as his bogus defamation counterclaim against Tesla is being funded by a hedge fund, Cable Car Capital LLC, which is also a short seller of Tesla stock.”Tesla has sued Tripp, a onetime technician at a Nevada factory, for allegedly stealing company trade secrets after he was denied a promotion. Tripp, in turn, filed his own suit accusing Tesla Chief Executive Officer Elon Musk of smearing him. Much of the fight has been waged through Twitter and strategic media leaks.According to Tesla, Tripp on Aug. 7 posted a link on Twitter to a public Google Drive folder that housed “voluminous” material related to the lawsuit, and he shared videos on YouTube discussing the case and Tesla secrets. The disclosures included confidential records produced by Tesla, transcripts and mediation documents.Tesla’s Phantom Shooter: The Strange Story of a Debunked ThreatTripp initially said he wouldn’t remove the information posted. On Aug. 8, he removed the link to the Google Drive folder, but by then the material had been shared and saved by others, Tesla said.“We’re obviously horrified and disappointed about what has happened,” William Fischbach, one of Tripp’s lawyers, said at a hearing by phone Tuesday on Tesla’s emergency request.Tripp is parting ways with his lawyers and intends to represent himself, Fischbach said.U.S. Magistrate Judge Carla Baldwin ordered Tripp to stop disseminating and discussing confidential information from the lawsuit, including re-tweeting other people’s postings that contain the confidential documents. She also ordered Tripp to not contact Tesla’s lawyers directly as long as he’s still represented by his own attorneys.In addition, the judge scheduled a hearing on whether Tripp should be held in contempt of court for violating the order to keep information confidential and what sanctions he might face if so. Those sanctions could include dismissing his claim against Tesla and rendering a default judgment against him, Baldwin said.Shorting a stock is selling borrowed shares, buying them back once they’ve fallen and pocketing the difference.The case is Tesla Inc. v. Tripp, 18-cv-00296, U.S. District Court, District of Nevada (Reno).(Updates with ruling in fourth and 10th paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.