Tesla 3-for-1 stock split

 

Tesla just submitted its annual proxy statement with the Securities and Exchange Commission, revealing that it planned a three-for-one stock split.

“We believe the Stock Split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value. In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the Stock Split will also make our common stock more accessible to our retail shareholders,” according to the SEC filing.

Tesla's stock was up more than 1% after hours after closing at $696.69 on Friday.

Larry Ellison, a board member, will also be resigning and will not be replaced, according to the company in the filing. It added that Ellison “will not stand for re-election to the Board when his current term ends at the 2022 Annual Meeting.”

“The Board currently expects to reduce the number of Board seats to seven upon the expiration of Mr. Ellison’s term ...”

A stock split may suggest that smaller investors believe they can buy the shares, but such investors are insignificant in comparison to large institutions. Many brokerages currently provide fractional trading, which allows small investors to purchase a piece of what appears to be pricey stocks.

The EV company also announced that board member Larry Ellison holds 1.5 percent of Tesla shares in its 2022 proxy statement.

According to a company report, CEO, Elon Musk, owns 23.5 percent of the company's stock, while Vanguard owns 6%. Since late 2021, Musk has sold a significant portion of his Tesla shares, in part to fund a position in Twitter, the social media company he agreed to buy for $44 billion.

Since the announcement of the split in late March, shareholders have been waiting for more information. Tesla revealed that at its annual meeting this year, investors would be asked to vote on whether to issue extra shares to facilitate a stock split. The split, according to the company, will allow more investors to invest in it, as well as increase its market influence.

Tesla's stock has been struggling recently, especially after CEO Elon Musk proposed a $44 billion Twitter takeover in April, and is down 44.8 percent year to date. It's also down roughly 5% in the early hours of June 13 so far.

Tesla is being requested to review and report a little more about the anti-harassment and discrimination initiatives, lobbying methods, supply chains and labor, as well as facts regarding its use of water and water-related environmental impacts and risks in 13 different shareholder recommendations.

On August 4, 2022, the company will have its yearly shareholder meeting online, with a small number of shareholders allowed to attend in person at the company's new plant in Austin, Texas.