Tesla shareholders to vote on second stock split in two years
Tesla shareholders are expected to vote on Thursday whether to green-light the company’s latest stock split – the second in two years.
“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 maximise stockholder value,” Tesla said in its annual proxy statement.
“In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the stock split will make our common stock more accessible to our retail shareholders.
The electric vehicle (EV) giant initially proposed the three-to-one split in June, the Times first reported.
By tripling each existing share, the move is said to give more flexibility to employees with stocks in the company.
The stock split doesn’t alter a company’s value but, by cutting down the share prices, it widens the pool of investors.
In August 2020, Tesla carried out a five-for-one stock split, which increased its share price by 61 per cent.
The automotive marquee beat market expectations when it posted revenue of $16.9bn and earnings per share worth $2.27.
City PM has approached Tesla for comment.