Tesla Proposes 3-for-1 Stock Split As Share Price Plunges 40%

Tesla proposed a three-for-one stock split on Friday (Saturday, June 11, 2022, in Manila), making a single share of the electric car maker more accessible to investors while having no effect on the company's overall market value, the Associated Press (AP) reported.

Photo Insert: The stock of the Austin, Texas-based company closed Friday at $696.69.

Companies use share splits when the price of their stock becomes too high for retail investors to purchase individual shares, or when the company wants more shares to exist in the marketplace to make the stock more liquid to trade.

Tesla made the announcement in its annual proxy statement, along with the announcement that Oracle co-founder Larry Ellison will not seek re-election to the company's board.

In late March, the company announced its intention to split its stock for the second time in two years. At the time, the shares were worth more than $1,000 each, but the stock has dropped roughly 40% since early April, when CEO Elon Musk first mentioned the possibility of buying Twitter.

The stock of the Austin, Texas-based company closed Friday at $696.69.

Meanwhile, Reuters' Akash Sriram and Hyunjoo Jin reported that Tesla's further shareholder proposals include corporate governance-related items such as employees' right to form unions and Tesla's efforts to prevent sexual harassment and racial discrimination.

"In 2021, the National Labor Relations Board upheld a 2019 ruling that Tesla illegally fired a worker involved in union organizing, and that the CEO had illegally threatened workers regarding unionization," according to a stockholder proposal cited in Tesla's filing.

Musk, rabidly anti-union, invited the United Auto Workers (UAW) labor union to hold a vote at Tesla's California factory in March. However, the proposal stated that "Tesla does not have any formal policy commitments to respect the right to freedom of association, nor has it demonstrated how it would effectively operationalize such a commitment."

Tesla's board of directors advised against voting on the proposal, stating that the company recently increased the base pay for its manufacturing jobs and is "actively engaged" in protecting employees' rights.

Following a slew of lawsuits, shareholders proposed an annual report on Tesla's efforts to prevent sexual harassment and racial discrimination. A civil rights organization in California has filed a lawsuit against Tesla, accusing the company of failing to address widespread racist behavior at its Fremont assembly facility for years.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic