American electric car maker Tesla Inc said on Monday that it will seek approval from its shareholders to expand its share count in order to permit it to conduct a stock split in the form of a dividend. This pushed its stocks by 5 per cent.

The board of directors has authorised the proposal, and shareholders will vote on it at the annual meeting. If authorised, the stock split would be the most recent following a five-for-one split in August 2020, which made Tesla shares more affordable for staff and investors.

Alphabet Inc, Amazon.com Inc, and Apple Inc have all recently split their shares to make them cheaper, following a pandemic-induced surge in technology stocks.

“This (stock split) could further fuel the bubble in Tesla’s stock that has been brewing over the past two years,” said David Trainer, Chief Executive of investment research firm New Constructs.

Despite increased competition from legacy automakers and startup enterprises, Tesla has produced roughly a million electric cars each year while ramping up production by opening additional factories in Austin and Berlin.

“We think Berlin ramping, and both the MiniCar and India are on the horizon, we would agree with the timing,” Roth Capital analyst Craig Irwin said, hinting that companies usually execute stock splits when a good news is ahead.

Meanwhile, Tesla informed its suppliers and employees on Monday that the company’s Shanghai manufacturing will be shuttered for four days as the financial hub announced it would shut down in two stages to conduct bulk Covid-19 testing.

(Adapted from  BusinessIndisider.com)