Elon Musk’s company Tesla has asked its shareholders to approve a three-way stock split, which will lower the price of its stock.
Tesla stock has increased by 43.5% since the company’s last stock split in August 2020.
“The primary purpose of the Authorised Shares Amendment is to facilitate a 3-for-1 split of our common stock in the form of a stock dividend,” the company said in a fresh US SEC filing late on Friday.
“As of June 6, 2022, we have 1,036,390,569 shares of common stock outstanding, and the current number of authorised shares of our common stock is 2,000,000,000, which is insufficient to effectuate the Stock Split,” said the electric car-maker.
If the stock split goes into effect on that date, Tesla shareholders will receive two additional shares of common stock.
Tesla also announced that Oracle co-founder and CTO Larry Ellison will not be re-elected to the company’s board of directors.
“In June 2022, Lawrence J. Ellison, a Class III director, determined… that he will not stand for re-election to the Board when his current term ends at the 2022 Annual Meeting,” said the company.
“The Board currently expects to reduce the number of Board seats to seven upon the expiration of Ellison’s term at the 2022 Annual Meeting, and, therefore, votes or proxies may not be submitted for the election of more than two board seats,” it added.
Tesla said that the Stock Split would help reset the market price of its 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”.
While Musk recently announced that Tesla would reduce its salaried headcount by 10%, a Goldman Sachs analyst predicted that the move could save the company up to $1 billion in annual operating expenses (OPEX) — the company’s day-to-day expenses.
Elon Musk has committed to providing an additional $6.25 billion in equity financing for his $44 billion takeover of Twitter, bringing his total equity commitment to $33.5 billion.