Watched a couple talking heads jabbering about the Stock split.
All said the same basically the same thing....It does not change anything....what's the big deal?
Here is the big deal IMHO.
Elon Musk cares about people and the small investor. I believe that was a big factor in the whole going private at 420 episode.
By splitting the stock more individual investors can and will buy shares. As SMR would say "this matters"
My son who is just starting out will be able to buy shares..so will my daughter...and so will millions more individual's.
The door is opened to many more people.
Enough of catering to the thief's on wall street. EM hates those leeches and so do I.
I LOVE this Split as it is a big present for the man on the street.
Here’s the bigger deal that hardly anyone is talking about:
Binky has 100 shares today at $1554.76 for a total non-diversified investment account value of $155,476.00.
For every $1 that the SP increases until stock split day, Binky’s NDIA will increase $100 in value.
Let’s say on stock split day the SP closes at $2000 even. Binky’s storyteller is crazy optimistic. On the close of August 28 Binky’s 100 shares in his NDIA will have a value of $200,000. The SP rose $445.24 and Binky gained $44,524.00.
On August 31 the magic pixie dust is sprinkled by his fairy godmother and suddenly Binky’s 100 shares turn into 500 shares. They are worth $200,000 and the SP is reset to $400 from $2000.
People all arguing nothing has changed. Ha!
Just before market open on August 31 the S&P announces TSLA inclusion (for storytelling purposes only, we all bloody well know it ain’t happening). Market opens and the SP skyrockets by the same $445.24 to a total SP this time of $845.24.
And here’s the magic, Binky’s NDIA doesn’t increase by $100 per $1 rise but by $500 per $1 rise. So that $44,524 before the split, becomes $222,620 after the split because Binky has 500 shares now, not 100.
No, the SP isn’t going to rise and fall by the same dollar average as it does now. This is where you need to consider SP rise and fall as a percentage. Someone is going to argue that the SP will just continue to move by the same percentages after as before so it’s all a wash, but this is where the psychology of a lower SP comes in for new and current investors. It could be argued that SP appreciation will be faster from $400 to $1000 than $2000 to $2600 for a variety of reasons. Or let’s do it as an equal percentage; $400 to $800 vs $2000 to $4000.
