Pete Pachal, CoinDesk’s chief of staff for the content team, argues Elon Musk’s tech layoff announcement is due to the bad ‘economy.’
Tesla is making the case to shareholders supporting a 3-for-1 stock split.
Elon Musk’s electric-vehicle maker, in proxy materials released late Friday, explained how the move will help attract and retain talent via compensation benefits.
“Unlike other manufacturers, we offer every employee the option of receiving equity. 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” the filing explained.
REGULATORS SPEED UP TESLA’S AUTOPILOT INVESTIGATION
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 696.69 | -42.20 | -5.71% |
The stock, based on Friday’s closing price of $696.69 would bring the shares down to $232.23 likely attracting a new crop of smaller investors. The company is seeking to authorize an additional $4 billion in stock.
“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” the company added.
So far this year, Tesla shares have fallen 34% more than the Nasdaq Composite’s 27% slide as inflation and rate hike fears batter U.S. financial markets.
Tesla CEO Elon Musk at Tesla’s Shanghai factory in Shanghai ((Ding Ting/Xinhua via AP))
Earlier this year, Musk warned that inflation was likely a bigger problem than how it appeared in early Spring.
CONSUMER INFLATION HITS FRESH 40 YEAR HIGH IN MAY
“Inflation is at like a 40 or 50-year high. And I think the official numbers actually understate the true magnitude of inflation…and that inflation appears to be likely to continue for at least the remainder of this year” he said on the electric-vehicle maker’s April earnings call. He also detailed how Tesla’s suppliers are preparing. “In some cases, we’re seeing suppliers request 20% to 30% cost increases for parts from last year to the end of this year” he disclosed.
ELON MUSK’S INFLATION DURATION WARNING
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TWTR | TWITTER INC. | 38.98 | -0.55 | -1.39% |
Along with running Tesla, Musk is also in the middle of a battle Royale over his $44 billion Twitter acquisition which remains in limbo over the validity of company metrics tracking spam accounts.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 109.65 | -6.50 | -5.60% |
| GOOGL | ALPHABET INC. | 2,223.23 | -112.07 | -4.80% |
| SHOP | SHOPIFY INC. | 348.43 | -22.96 | -6.18% |
Tesla would follow Amazon which successfully secured its 20-for-1 split which went into effect earlier this month. Next on deck, Google and Shopify. These companies have expressed similar reasoning to shareholders in seeking approval for splits.
CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing “Cyber Rodeo” grand opening party in Austin, Texas, on April 7, 2022. (Photo by SUZANNE CORDEIRO/AFP via Getty Images) (SUZANNE CORDEIRO/AFP via Getty Images / Getty Images)
Shareholders will vote at the company’s annual meeting set for August 4, 2022, its part virtual with a small group attending in person at Gigafactory Texas.
