Technology

Tesla files for 3-for-1 stock split

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Elon Musk, during an event at SpaceX headquarters in Hawthorne, California, U.S., on Thursday, Oct. 10, 2019.
Bloomberg /Getty

Tesla just filed its annual proxy statement with the SEC and revealed it plans a three-for-one stock split, and that board member Larry Ellison does not plan to stand for re-election.

Shares of Tesla were up about 1% after-hours.

In the filing, the company wrote of the proposed stock split, “Our success depends on attracting and retaining excellent talent,” and that “highly competitive compensation packages,” offering every employee an option to receive equity, helped Tesla to do that. “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.”

A stock split is cosmetic but could mean that smaller investors feel they can afford the stock, but those investors are minuscule compared to major institutions. Many brokerages also already offer investors fractional trading, allowing small investors to buy a slice of seemingly expensive stocks.

In its 2022 proxy filing, the electric vehicle and renewable energy business, also revealed that board member Larry Ellison currently owns 1.5% of Tesla shares. Ellison plans to relinquish his duties as a member of Tesla’s board of directors, but the filing did not say who may replace him.

The filing also says that Tesla CEO Elon Musk currently holds 23.5% of Tesla shares and Vanguard holds 6% of Tesla shares. Musk sold a considerable chunk of his Tesla holdings since late 2021, in part to shore up a stake in Twitter, the social networking giant he agreed to acquire for around $44 billion.

Tesla announced a similar five-for-one stock split in August 2020.

This is breaking news. Please check back for updates.

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