Tesla’s stock has skyrocketed 837% in the past five years and that means its $696.69 price tag puts it out of reach for many small investors.
However, it could become more obtainable as the company has announced plans for a 3-for-1 stock split in a proxy statement filed with the U.S. Securities and Exchange Commission.
Noticed by CNBC, the move would see the company issue four billion new shares of common stock with holders receiving three shares for each share they currently own. This move would help to lower Tesla’s stock price and the company noted the price has climbed 43.5% since their last stock split in August 2020.
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Tesla went on to say “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.”
Tesla’s board has already approved the move, but it’s adoption is contingent upon stockholder approval. The board is recommending that shareholders vote yes on the proposal and, if approved, the company would follow Amazon which had a 20-for-1 stock split earlier this week.
In other news, the proxy statement revealed Tesla CEO Elon Musk holds 265,488,606 shares which represents a 23.5% stake in the company.
