Tesla is asking its shareholders to accept a three-way stock split to assist buyers to get a better deal on the company’s equity.
The request is part of a list of measures Tesla intends to propose at its August 4, 2022 shareholder meeting, which the company filed with the US Securities and Exchange Commission on Friday. Tesla is pitching it as a method to “reset” its stock price, which has risen considerably in recent years – 43.5 percent since the company’s most recent stock split in August 2020.
“While this value appreciation has resulted in great benefits for our employees over the years,” the business writes, “we want to ensure that all employees, regardless of when they join, have access to the same advantages.”
The stock of the electric vehicle manufacturer closed Friday at $696.69 a share, down 22 percent from the previous day and with a total market valuation of more than $721.8 billion. However, at such high prices, it is difficult for individuals — particularly retail traders utilizing platforms such as Robinhood — to hold more than fractional shares of the corporation.
If the stock split goes into effect on that date, Tesla shareholders will receive two more shares of common stock. Because the value of the shares tends to remain constant, institutional investors are generally indifferent to stock splits.
Tesla also announced that Oracle co-founder Larry Ellison, who is also assisting Elon Musk in his takeover effort for Twitter, will not seek re-election to Tesla’s board of directors. Tesla, on the other hand, has no intention of replacing him. Instead, the board would lower its size from eight to seven seats.
