Tesla shares will become three times less valuable.

The company announced on Friday that its board approved a 1: 3 stock split, its first split since August 2020.

The split will have to be approved by shareholders at the company's annual meeting in August,

reports .

Tesla (TSLA) closed on Friday at $ 696 per share.

If the split were to take place today, her share would be worth $ 232 per share.

Companies share their shares for many reasons.

The divisions may place their shares within the capabilities of smaller individual investors.

It helps companies gain liquidity and divisions can create more demand for a company's shares.

The rise of zero-fee trading applications, including Robinhood, E-Trade and others, has made stock splits much more important in recent years.

Tesla said it took these factors into account - as well as employees who are paid for the company's stock.

Tesla's move could also target its inclusion in the famous Dow Jones Industrial Average, which tends to include less expensive stocks.

Apple (AAPL), for example, announced a 1: 1 split in 2014 and joined the Dow in 2015