In a regulatory filing released Friday afternoon, Tesla said it would ask shareholders to approve its second stock split in less than two years at its upcoming annual meeting, after teasing a split earlier this year.
Tesla said in its annual proxy filing that it will hold a shareholder vote to allow a 3-for-1 split of its common stock at its upcoming annual meeting on August 4.
The company pointed out its share price has risen about 40% since its last stock split and said it believes another split will “help reset the market price” to give employees more flexibility in managing their equity—and make shares more accessible to retail investors.
Tesla previously teased plans for the split in April.
In the Friday filing, Tesla also revealed billionaire Larry Ellison, cofounder and executive chair at Oracle, would step down from the company’s board at the annual meeting, and that it won’t seek to replace him, reducing the number of board seats to seven.
Tesla shares, which have plummeted 42% this year, ticked up 1.3% to $703 in after-hours trading immediately after the announcement, paring losses of 3% for the day.
The stock split would be the electric vehicle maker’s second during the pandemic and follows a slew of others from big-tech heavyweights. In February, Google parent Alphabet announced a 20:1 stock split, and in July 2020, Apple announced a 4-for-1 split. Some experts argue that though stock splits are largely symbolic, lower stock prices make shares more affordable to a wider group of investors. “From what we’ve seen in the market with Tesla and Nvidia, people like to chase splits,” portfolio manager David Wagner of Aptus Capital Advisors recently told Forbes, referring to an over 70% run-up in Tesla share prices in the 20 days between announcing and completing its last stock split.
Less than three months after prices skyrocketed in anticipation of its last split, Tesla announced it was looking to raise up to $5 billion in a stock offering.
$215 billion. That’s how much 50-year-old Tesla Chief Elon Musk was worth Friday, according to Forbes, making him the world’s richest person.