Tesla Inc (NASDAQ: TSLA) stock continued its bullish momentum even after stock split, rising over 10.5% on August 31st, 2020 (as of 11:10 am GMT-4 ; Source: Google finance). TSLA’s shares have risen over 420% since the beginning of this year, turning some retail investors into millionaires. TSLA became the world’s most valuable carmaker by market capitalization when it overtook former front runner Toyota Motors Corp on July 1. The company now forms for about 41% of the total market cap of a group of 12 of the world’s largest automakers. The company has said it would deliver at least half a million vehicles by the end of 2020, which is less than 5% of Toyota’s and Volkswagen’s annual sales.
Meanwhile, Japan’s Toyota and Germany’s Volkswagen AG had sold 10.46 million and 11 million vehicles, respectively, during the fiscal year 2019. That is compared to the 367,200 vehicles Tesla delivered in 2019. Japan’s Toyota and Germany’s Volkswagen AG had sold 10.46 million and 11 million vehicles, respectively, during the 2019 financial year. That is compared to the 367,200 vehicles Tesla delivered in 2019.
On the other hand, the company’s operating profit improved in Q2 despite challenging circumstances. Positive impacts included lower operating costs driven by a temporary reduction in employee compensation expense, a sequential increase in regulatory credit revenue and deferred revenue recognition of $48M related to a Full Self Driving (FSD) feature release. These positive contributions were offset by significant costs related to factory shutdowns, as well as a sequential increase in non-cash SBC expense mainly due to $101M related to 2018 CEO award milestones. The Quarter-end cash and cash equivalents increased by $535M QoQ to $8.6B, driven mainly by free cash flow of $418M. Free cash flow was negatively affected by a higher percentage of deliveries occurring towards the end of the second quarter compared to prior quarters, as well as an increase in government rebates and regulatory credit receivables, which are paid in accordance with their payment terms.
Additionally, the company has recently declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors. Each stockholder of record on August 21, 2020 will get a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.