Tesla proposes a 3-for-1 stock split; Ellison to leave Board

Tesla proposes a 3-for-1 stock split; Ellison to leave Board

NEWYORK — Tesla suggested a three-for-1 stock split on Friday. This move will make one share of the electric car manufacturer more accessible to investors, but not impact the company’s overall market values.

Tesla Inc. announced the news in its annual proxy statement. It also stated that Larry Ellison, the co-founder of Oracle, will not be standing for reelection to the company’s board.

The company announced in March that it was planning to divide its stock for the second consecutive year. The shares were trading at $1 ,000 each at that time.

But Tesla’s stock has fallen about 39% since early April, shortly after its CEO Elon Musk started raising the idea of buying Twitter. Shares in the company headquartered in Austin, Texas, closed Friday at $696.69.

Share Splits are used when the stock price is too high for retail investors to purchase individual shares or when the company wants more shares to be available in the market to make the stock more liquid.

In its statement Tesla stated that it was trying to achieve both these goals: giving employees more shares and making the stock more accessible for retail investors.

Musk plans to use his Tesla shares as collateral to buy Twitter and possibly sell his stake in the company for financing.

Tesla shareholders are expected to vote on the share splitting at the company’s annual meetings on Aug. 4. The company announced that Ellison, a Tesla investor and friend, will be leaving its board. In late 2018, Ellison was one the two independent members appointed to the board as part of a settlement with Securities and Exchange Commission. This had requested more oversight of Musk.

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