Elon Musk's Tesla to seek board approval for 3-to-1 stock split

Electric carmaker Tesla has announced plans for a 3-to-1 stock split, which will make its shares more affordable as it looks to recoup from the stock decline it is witnessing since April.

According to the US Securities and Exchange Commission (SEC) regulatory filings, Tesla said, “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 maximise stockholder value.”

The share price of Tesla has been down by nearly 40 percent ever since CEO Elon Musk disclosed his stake in the micro-blogging site Twitter and subsequent announcements to acquire the company.

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The stock split is also expected to make Tesla shares more affordable for retail investors. “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,” the filing noted.

The decision for a stock split is among numerous proposals that Tesla will put up during its annual stockholder's meeting on August 4. Earlier in August 2020, Tesla had gone in for a five-for-one stock split.

Moreover, one of Tesla's board members — Larry Ellison, Co-founder of Oracle Corporation, and a friend of Elon Musk — will not stand for re-election to the board when his term ends during this year’s shareholder meeting.

If approved by shareholders, Tesla will join technology giants, including Alphabet, Apple, and Amazon, who recently split their shares.