Shares of Tesla Inc (NASDAQ: TSLA) are up in extended trading on Friday after the leading U.S. electric cars manufacturer proposed a three-for-one stock split.
Rationale for the proposed stock split
The EV maker revealed its plan in the annual proxy statement with the U.S. Securities and Exchange Commission (SEC). Stating the rationale for the stock split, Tesla said:
Unlike other manufacturers, Tesla offers every employee the option of receiving equity. We believe the Stock Split would help reset the market price of our common stock so that our employees will have flexibility in managing their equity.
The stock has taken a massive hit this year, now down more than 40% versus the start of 2022. Last week, the Austin-headquartered company also said it will cut 10% of its salaried staff.
Larry Ellison to step down as board member
Also on Friday, Tesla said Larry Ellison will not stand for re-election as a member of the company’s Board of Directors. Its annual shareholder meeting is scheduled for August 4th.
The Nasdaq-listed company is yet to announce who will take Ellison’s place on the board. Ellison has a 1.5% stake in Tesla Inc versus 23.5% for CEO Elon Musk and 6.0% for Vanguard.
A day earlier, data from the China Passenger Car Association (CPCA) confirmed a strong rebound in Tesla sales. UBS sees a 50% upside in TSLA at present.