Electric vehicle maker Tesla (TSLA) said it will ask shareholders to approve a 3-for-1 stock split
at its August annual meeting, according to a recently filed proxy statement.
The proposed split in the form of a dividend comes amid a sharp selloff in Tesla stock, which is
down nearly 35% this year to just under $700 U.S. a share compared to a nearly 20% drop for
the benchmark S&P 500 index.
The company also said that Larry Ellison will step down from its board of directors. Ellison, the
11th richest person in the world worth about $87 billion U.S., originally made his fortune as the
co-founder of the software company Oracle (ORCL), and joined Tesla’s board of directors in
December 2018. As of June 30, Ellison held a 1.5% stake in Tesla.
The electric-vehicle maker first announced its plan for a stock split on March 28 via a tweet that
lacked further details. The shareholder meeting will be held on August 4 both virtually and in
Austin, Texas, where the company is headquartered.
If approved, this will be Tesla’s second stock split in less than two years. The company
executed a five-for-one stock split in August 2020, leading to a 60% surge in the share price
from the day of the announcement to the execution date.
Alphabet (GOOGL) and Amazon (AMZN) each announced 20-for-1 stock splits this past winter
and both shares are down about 20% since the announcements were first made,
underperforming the S&P 500 index.
The steady erosion of Tesla’s stock over the past few months suggests its loyal following among
retail investors may not be able to counteract the overall souring in investor sentiment on the
company, especially with risk-appetite eroding.
