Tesla has filed their Notice of 2022 Annual Meeting on Stockholders, and within it has revealed it is proposing a 3-for-1 common stock split.
“The primary purpose of the Authorized Shares Amendment is to facilitate a 3-for-1 split of our common stock in the form of a stock dividend (the “Stock Split”). As of June 6, 2022, we have 1,036,390,569 shares of common stock outstanding, and the current number of authorized shares of our common stock is 2,000,000,000, which is insufficient to effectuate the Stock Split. Our Board intends to approve the Stock Split, subject to and contingent upon stockholder approval of the Authorized Shares Amendment,” reads the filing (via @SawyerMerritt).
“Our success depends on attracting and retaining excellent talent, not only through providing a respectful, safe, inclusive and equitable workplace, but also through offering outstanding benefits and highly competitive compensation packages. Unlike other manufacturers, we offer every employee the option of receiving equity,” explains Tesla.
“Since our stock split in August 2020 to June 6, 2022, our stock price has risen 43.5%. While this value appreciation has led to our employees benefiting enormously through the years, we want to make sure all employees, no matter when they join, have access to the same advantages,” detailed the electric automaker.
“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,” said Tesla.
The filing also notes board member Larry Ellison does not plan to get re-elected, reports CNBC.
Tesla’s annual meeting of stockholders is set to take place at Giga Texas on August 4, 2022.
Back in March, Tesla first proposed it would ask shareholders to authorize additional shares to support a stock split. Tesla’s filing was delayed last month but we now have the details on the stock split.
Tesla wants shareholders to vote “FOR”, when it comes to the following company proposals:
The most recent Tesla stock split was back in August 2020, when shares split 5-for-1.
A stock split does not diminish the value of Tesla shares, but rather lowers the overall entry price to purchase shares, offering opportunities to new investors to invest in the company. Existing shareholders would see their number of shares tripled in this case, so for example, 10 shares would become 30 shares, while retaining the same value.
In after-hours trading, shares of Tesla are up 1.91% as of writing.
…developing, more to follow
