Tesla plans a 3-for-1 stock split

In a form, Tesla filed with the U.S. Securities and Exchange Commission (SEC), Tesla said it would seek shareholder approval at its upcoming annual meeting to increase the number of authorized shares of its common stock from 2 billion to 6 billion. The primary purpose of the Authorized Share Amendment is to facilitate a 3-for-1 split of its common stock in the form of a stock dividend. In addition, company board member Larry Ellison, who holds a 1.5% stake in Tesla, is not re-elected and will retire in August.

Tesla said the plan would give employees more flexibility in managing their equity, help reset the market price of common stock, and make it easier for retail investors to buy shares. After Tesla announced its stock split plan, its stock price quickly reversed after the market, with an increase of more than 2.5% at one point. In the previous regular trading hours, the stock price closed down 3.12% at $696.69 per share.

If Tesla’s proposal passes, it would be Tesla’s first stock split since August 30, 2020. At the time, Tesla had a 5-to-1 stock split at $442 a share, and for nearly two years, Tesla’s stock price continued to rise. It hit an all-time high of $1,243.49 per share in November 2021. Some industry analysts believe that Tesla’s move is partly to make up for the dismal performance of the stock price this year.

Tesla isn’t the only company contemplating a stock split in the near future. Amazon had a 20-to-1 stock split at the beginning of the month, Shopify will have a 10-to-1 stock split by the end of the month, and Google parent Alphabet will have a 20-to-1 stock split in July.