The stock market has been in recovery mode for the last several weeks, and signs pointed to continued modest gains for major market benchmarks. As of 7:30 a.m. ET, futures on the Nasdaq Composite (^IXIC 0.10%) were up 14 points to 14,769, wiping out losses from earlier in the morning as investors kept up the index's positive momentum.
The big news helping the Nasdaq came from Tesla (TSLA 12.06%), which joined a couple of its Nasdaq peers in announcing plans that will dramatically change its share price. Meanwhile, though, a much smaller company announced news that was much more important to its fundamental business prospects, and the stock price jumped much more extensively. You can find out more about both companies below.
Tesla aims for its next stock split
Shares of Tesla climbed almost 6% in premarket trading on Monday morning. The move came amid news that should have been largely irrelevant to the stock's value, but which in practice always gets taken as a positive sign.
Image source: Tesla.
Tesla submitted a filing to the U.S. Securities and Exchange Commission saying it intends to seek an increase in the number of authorized shares of common stock its certificate of incorporation allows. That proposal will be part of the agenda at Tesla's upcoming 2022 annual shareholders meeting, the date of which hasn't yet been announced.
The purpose of the increase in shares is to allow Tesla to pay a stock dividend to existing shareholders in order to complete a stock split. That's the same format that the electric vehicle pioneer used to do its 5-for-1 stock split in August 2020, paying a stock dividend of four additional shares for every one share that Tesla shareholders owned prior to the split. Tesla's announcement didn't include the actual split ratio it intends to use this time around.
The move comes after several of Tesla's Nasdaq peers have made similar moves. Both Amazon and Alphabet recently announced 20-for-1 splits that will bring their share prices down from four-digit figures.
With many brokers offering fractional shares, the Tesla stock split won't necessarily do much to open up access for small investors. Nevertheless, the move is consistent with what Tesla has done in the past, and investors are reacting with the same bullishness they have with previous splits.
A rising Staar
Meanwhile, shares of Staar Surgical (STAA -0.77%) enjoyed a much bigger gain. The maker of implantable ocular lenses announced a favorable development that should bolster its business substantially.
Staar announced Monday morning that the U.S. Food and Drug Administration had granted approval for its EVO/EVO+ Visian Implantable Collamer Lens. The product helps patients suffering from myopia, which is the most common vision disorder around the world. Also known as nearsightedness, myopia affects an estimated 100 million adults in the U.S. between the ages of 21 and 45 -- the demographic that Staar sees as being potential candidates for the EVO lens product.
CEO Caren Mason explained the benefits of EVO. In addition to correcting for myopia, the EVO lens offers high-quality vision in both day and night conditions and typically doesn't result in dry eye. It's removable by doctors when desired, and sales outside the U.S. have more than doubled in the past four years.
Investors are excited at a potential boost in the use of Staar's lenses. With the stock down by more than half since August 2021, Staar was overdue for some good news.
