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Tesla (TSLA) Shareholders Approve 3-For-1 Stock Split

Shareholders of Tesla, Inc. (TSLA) approved a 3 for 1 divide of the society ordinary actions at its annual meeting held after market close on August 4, 2022, according to a preliminary count announced at the meeting. A final statement will be published on SEC Form 8-K within four working days. The vote increases Tesla’s authorized common stock from 2 billion to 6 billion. Tesla reports he had just over a billion joint dollars outstanding shares to June 6, 2022.

Tesla’s annual meeting also voted on eight shareholder proposals. The preliminary count indicates that seven of them were rejected, as recommended by management. However, preliminary results indicate that Proposal 6 on the agenda, aimed at increasing the ability of shareholders to nominate competing candidates for board seats, has been adopted.

Key points to remember

  • Tesla, Inc. (TSLA) shareholders voted to approve a 3-for-1 split of the company’s common stock.
  • The preliminary vote count was announced at Tesla’s annual meeting on August 4, 2022. Final results will be released within four business days.
  • Tesla’s stated rationale is to give employees “more flexibility in managing their equity” and to increase the stock “more accessible” to retail investors.
  • A proposal to give shareholders more power to nominate competing candidates for board seats appears to have passed, despite opposition from management.

Why Tesla wanted a stock split

In his proxy statement, Tesla said attracting and retaining top talent is the primary motivation for seeking to split its common stock. The company says that unlike other manufacturers, it gives every employee the opportunity to receive equity. Tesla notes that since its last spin-off in August 2020 through the date of its June 6, 2022 proxy statement, its stock price has risen 43.5%. Since then, he has continued to progress.

Tesla says reducing the market price of its common stock through a spin-off will give its employees “more flexibility in managing their equity.” The company believes that increasing employee satisfaction in this way can help maximize shareholder value. Tesla also expects that reducing the stock price through a stock split will make its common stock more accessible to retail investorswhich she sees as a positive development.

Although a stock split should theoretically not change the valuation of all outstanding shares, the lower price per share may attract more potential buyers, somewhat increasing the overall valuation of the stock.

Tesla common stock fell from its all-time high in November 2021 and hit a low in June this year when it began to post a strong run, approaching $1 trillion in market value. The stock closed at $925.90, up $3.71 (0.40%), on August 4, 2022. The effective date of the split has not been announced. Tesla shares rose less than 1% in extended trading.

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