Tesla to split shares in three to attract employees and small investors

Tesla to split shares in three to attract employees and small investors
© Belga

Electric car manufacturer Tesla wants to split its Wall Street shares into three to make them more accessible to employees and small shareholders. Many big-name tech companies have already done this, Belga News Agency reports.

The company, headed by Elon Musk, had already divided its shares by five in 2020 for the same reason. In March, Tesla indicated that it would ask shareholders at its general meeting for the green light to increase the number of shares in circulation by dividing them again. However, the company did not say by how much shares would be divided.

The proposed share increase will be put to the vote at the group’s general assembly on 4 August.

Stock for all

Other stock market heavyweights whose shares have exploded in recent years have been carrying out similar operations, including Amazon, which divided its shares by 20 on Monday. Google parent company Alphabet plans to do likewise on the 1st of July.

Splitting shares does not change the total value of a company. It simply increases the number of shares in circulation. Yet companies that split shares, thereby making individual shares cheaper, hope that the lowered prices will attract small shareholders.

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Tesla explained on Friday that it was offering all employees the opportunity to purchase shares as a way of attracting and retaining the best talents.

Lowering the unit price from the current $700 would give shareholders greater flexibility to manage their shares, the car manufacturing company said.


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