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Tesla stock split tp benefit employees manage their equity
Also, for retails investors to invest in the company

Tesla announced a stock 3:1 stock split on Friday and the news is flooded with various opinions. Last year there was a 5:1 stock split where the share of $2,213.40 per share was split. Now Tesla submitted a 14S filing with the SEC, mentioning its plans for the annual stockholder’s meeting on August 4. The number of shares will be tripled.

Tesla Stock Split: Tesla seeks 2nd stock split in less than 2 years

Image credits- The ET

On Friday the share price of the Tesla stock closed at $696.69. Tesla explained the reason for this move so employees could better manage their company equity. Also, they maximize the stockholder value. It is said that retail investors are interested in Tesla stock, which is why Tesla made the shares more accessible. Having a stock split will reduce the stock’s share price and make it more accessible to other investors.

Last year there was a stock split when the share value reached $2,213.40. The price is high and was not available for young and retail investors. Later as the price reduced, many young investors took part in it, as well as other entities.

Tesla has various employee equity programs to attract its employees to buy the stocks. Which also includes the “Employee Stock Purchase Plan (ESPP). Which makes it possible for employees to buy the stocks at a discounted price. The benefits attract various employees, and also ensure high-end talent remains in the company. A stock split was also part of its plan to rejuvenate the benefits package.

Previous stock split

“Our success depends on attracting and retaining excellent talent, not only through providing a respectful, safe, inclusive and equitable workplace but also through offering outstanding benefits and highly competitive compensation packages. Unlike other manufacturers, we offer every employee the option of receiving equity,” Tesla said. “Since our stock split in August 2020 to June 6, 2022, our stock price has risen 43.5%. While this value appreciation has led to our employees benefiting enormously through the years, we want to make sure all employees, no matter when they join, have access to the same advantages. We believe the Stock Split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value.”

Retail investors shouldn’t fret, Tesla still kept them in mind when announcing the 3:1 split. “In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the Stock Split will also make our common stock more accessible to our retail shareholders,” Tesla said in the filing.

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