Japanese automaker Toyota Motor Corp. (TM) is offering a number of new shareholder rewards as it tries to attract retail investors and boost its sagging share price.
The world’s largest vehicle manufacturer said it plans to offer several new perks and incentives to retail investors after the company’s stock declined about 10% to start the year. The new rewards include digital credits and a chance to win tickets to motorsport events.
Investors who have held at least 1,000 Toyota shares for five years or longer will receive credits worth about $200 in a Toyota Wallet, which is a smartphone payment app. At the same time, eligible shareholders can enter draws to win tickets to see races at the Fuji Speedway later in the year.
New Approach
This is the first time that Toyota has implemented such a program, and it goes beyond the usual stock buybacks and dividend payouts that publicly traded companies typically use to reward shareholders. Analysts were quick to say that the new rewards are an attempt by Toyota to attract retail investors and help boost its sagging share price.
However, these types of shareholder rewards are drawing criticism from global funds and institutional investors who aren’t eligible to benefit from them. Toyota isn’t the first publicly traded company to offer creative shareholder rewards to attract retail investors. Last December, Rakuten Group offered one-year free mobile plans to its shareholders.
The stock of Toyota Motor Co. has declined 26% over the last 12 months.
Is TM Stock a Buy?
Let’s take a look at the three-month performance of Toyota Motor Co.’s stock price. As one can see in the chart below, the company’s share price has risen nearly 4% in the past three months. However, almost all of that gain came after the automaker announced its new shareholder rewards.
