Blog Tesla Announces Stock Split

Tesla announced Tuesday a 5-for-1 stock split in an effort to bring the highly-price stock down to attract more investors.

According to a SEC filing: Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020.

The split wasn’t a total surprise, but it came sooner than expected. When asked on Twitter on June 30 about the possibility of a split, Musk said it was “worth discussing” at the company’s upcoming annual shareholder meeting.

https://twitter.com/x/status/1278172605477007360

Tesla’s stock has received a big bump in recent months, more than quadrupling since March. The stock jumped nearly 6.6 percent after the announcement to $1,465.00 by 7:30 a.m. Wednesday. The current valuation makes Tesla the largest automaker in the world.

 

[plumazul]

"a dividend"??

 

[jeremymc7]

And thus stock prices start surging.

 

[pgolden]

"a dividend"??

A dividend can be either a cash amount, which is what one usually thinks of with that word, or a stock split.

Those buying in now expecting to have their ownership In dollars magically quadruple after the split will be sorely disappointed

 

[Agni]

And thus stock prices start surging.

Crash coming, not just for Tesla but the stock market in general. Our economy is on life support...

 

[jeremymc7]

Crash coming, not just for Tesla but the stock market in general. Our economy is on life support...

If it's anything like mid March or worse I'll be buying in heavy in a lot of places.

When will this occur though?

 

[persephone]

A dividend can be either a cash amount, which is what one usually thinks of with that word, or a stock split.

Those buying in now expecting to have their ownership In dollars magically quadruple after the split will be sorely disappointed

A dividend ? Thus that mean it will be taxed ?

 

[jeremymc7]

A dividend ? Thus that mean it will be taxed ?

A cash payment I would expect to be taxed. But we're talking about a stock split here which I would expect wouldn't be.

 

[Bernesto]

A dividend ? Thus that mean it will be taxed ?

Pretty sure not. If you have $40k in stock pre split, you'll have $40k in stock post split. No gain = no tax. It is really just on paper that the number of shares you have is 5x, and the price is 1/5th each. That said, the stock has rallied, and if you sold post split at $50k, you'd have taxes on the $10k gained.

 

[MikeTX]

I do not understand all of this discussion about a stock split. Never before have I seen much ado about a stock split. It's not a big deal. It doesn't add any actual value. The fact that the stock went up so much on the news of a split shows how many clueless traders are in this stock.

 

[MikeTX]

If it's anything like mid March or worse I'll be buying in heavy in a lot of places.

When will this occur though?

Agreed. I got out of the stock at 16,000. I'll be back in when the first time Robinhood traders sell for a huge loss after holding the bag.

 

[Puma2020]

What most non Tesla folks don't seem to realize is that Tesla is NOT a car company. It is mainly an energy company that also sells EVs and sells solar. It took me a long time to figure out that you are not just investing in a EV company. Once they put in the Hornsdale plant in Australia, the world changed. Not quickly, but utilities started to look at that plant and the lightbulbs went on. Hopefully LED lightbulbs, but at least some of them went on. Now with Moss Landing and Switch datacenter in NV. Add in their battery technology and their willingness to sell to other manufacturers.

I bought a bunch of stocks in March and have now sold some, storing the profits for the next market crash.
As Warren says, buy when others are fearful, sell when others are giddy.

 

[rdunniii]

...
As Warren says, buy when others are fearful, sell when others are giddy.

Greedy.

 

[ItsNotAboutTheMoney]

I do not understand all of this discussion about a stock split. Never before have I seen much ado about a stock split. It's not a big deal. It doesn't add any actual value. The fact that the stock went up so much on the news of a split shows how many clueless traders are in this stock.

A stock split is a positive sign for entry into the S&P 500.

And since when does "actual value" matter for the value a stock?

 

[avoigt]

A cash payment I would expect to be taxed. But we're talking about a stock split here which I would expect wouldn't be.

Its unfortunately not as straight forward as we all want it to be but for most including US no issue. Different EU countries are handling this situation in a different way though. There is a separate thread opened for it.

 

[Cal1]

Ok since I'm planning on some serious share purchases post split, I'd like to request everyone pray for a slowdown on the current price increases! Up $100+ yesterday another $92 as of 10:02 pacific. They're making it more expensive to add to my position when the split occurs!

I'll get back to you on when it's ok to release these necessary restrictions.

Thanks for your support!

 

[HankLloydRight]

Ok since I'm planning on some serious share purchases post split,

Why are you waiting for 'post split'? Once the split happens (not that it ever makes any sense) there is a bump due to new people buying the 'cheaper' shares. If you can afford $x of stock now, it's probably better to buy it now then after the split.

(unless your entire post is a joke).

 

[Cal1]

Yes entire post was joke. I am gathering $'s together to buy post split. I'm sure we'll see some up pressure after the split but I've seen nothing to really show any advantage buying post or pre split. Hopefully I'll get in soon enough to get some of that growth.

 

[plumazul]

A dividend can be either a cash amount, which is what one usually thinks of with that word, or a stock split.

Those buying in now expecting to have their ownership In dollars magically quadruple after the split will be sorely disappointed

Well, a stock dividend and a stock split are different. Computing the basis of the new shares can be interesting. It just seems like a strange way to do it. Why not just do an ordinary stock split??

 

[PeteC]

"a dividend"??

Dividends are paid from money taken from the shares and thus reduce the shares by the exact amount of the dividend. This is normal. If AT&T pays a one dollar dividend, the share price is reduced by one dollar. Tesla will pay a dividend of precisely 20% of Friday’s closing price for each dividend share.