Tesla Inc proposed a three-to-one stock split on Friday, making its shares more affordable following recent sell-offs of the world’s most valuable automaker. The company also announced that Larry Ellison, a friend of Tesla CEO Elon Musk, will not run for re-election to Tesla’s board when his term expires at this year’s shareholder meeting. Ellison is one of the top investors who have committed to funding Musk’s $44 billion acquisition of Twitter Inc.
Shares of Austin, Texas-based Tesla rose more than 1% in extended trading on Friday. They have fallen nearly 40% since Musk unveiled his stake in Twitter in early April, hurt in part by a strict lockdown in Shanghai that has affected Tesla`s production.
On August 4, shareholders will vote on Tesla’s proposed stock split. If approved, it would be the first such action taken by the company since a five-for-one split in August 2020.
Tesla said the split would give its employees “more flexibility in managing their equity” and make the company’s stock “more accessible to our retail shareholders.”
Alphabet Inc, Apple Inc, and Amazon.com Inc all recently split their stock.
While a split has no effect on a company’s fundamentals, it may boost the share price by allowing a broader range of investors to own the stock.Elon Musk’s EV company intends to seek investor approval for a three-for-one split.