Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[SoGA Fan Club]

When it comes to assembling cars in factories: Georgia, Texas, Nevada, etc., knock yourself out.
We'll keep the lion's share of the innovation and design jobs here.
As a California resident (transplant from the East Coast), I hope you keep posting.

Economically speaking, Y'all best hope California doesn't secede from the union.

This is satire, but it's true at the same time:

Hell, I don't disagree with you at all. I've constantly said that we don't need to bring any manufacturing jobs back to America. They're low paying and do little for the economy. But, I'll say it again, manufacturing doesn't belong in California. And it seems you are agreeing with me. If people in other states want to be uneducated and make less money, that's where Tesla needs to build cars. Truthfully, Mexico might be a better choice than any state.

 

[StarFoxisDown!]

The confusion ensuing on this board from a simple stock split, is very telling. Most participants here do not have a clue. Let me put it simply: there is no way for anyone to game the system here. With the effective date declared, there is no way for anybody to get screwed. Even if you're really stupid. If you sell before the effective date you will sell the amount of shares you NOW own. If you sell on, or after, the effective date, you will be selling 5x shares, at 1/5 the price. If you are an options jockey, divide or multiply everything by 5, with those dates in mind.

That's not what most of the discussion here is about. It's about the dividend part.

 

[StarFoxisDown!]

The confusion seems to be more about how this affects shorts.

My streak of being beaten today continues......

 

[M|S|M MYP]

My streak of being beaten today continues......

You probably should look into getting some Starlink Internet service

 

[FastCompany]

WKRP Thanksgiving was the funniest 30 minutes in TV history.

Who knew turkeys couldn't fly ?

 

[wipster]

It's been a while since I last refreshed on this, but I'm fairly confident there is no effective difference between a normal stock split and a dividend stock split -- it's just semantics and mechanics based on the state of incorporation.

Apple and Tesla are different because they are incorporated in different states.

Apple is a California corporation and the California corporate code directly contemplates stock splits. In other words, you don't need to "dividend" out the extra shares.

Tesla is a Delaware corporation and it mechanically requires a dividend to implement a stock split.

That's it.

Thank you! I was wondering the reason for doing in this manner and this explains it.

 

[Bet TSLA]

Funny watching CNBC pretending they don’t get why a stock has a pop when a split happens.

I mean cmon. You really dislike TSLA that much that you have to act clueless?

I guess so...

What's funny about it? A stock split changes nothing relevant. There's no fundamental reason for it to affect the stock price. The only reason it is going up after hours is because people think other people might see this as an optimistic sign. It isn't, of course, so any effect will disappear over a short time (a day? a week?). But TSLA is sufficiently volatile that the ups and downs will happen and can be ascribed to any old thing. Just like the drop over the past few days is due to nothing other than random fluctuations, but people are dreaming up all sorts of reasons.

Just wait. Tomorrow the stock price will do something. No matter what it is, the "experts" will say it was because of the split announcement.

 

[Krugerrand]

AAAAAYYYYYYY

Can you elaborate/add some color to that comment. I’m not yet fluent in SpaceCashese.

 

[Thekiwi]

Funny watching CNBC pretending they don’t get why a stock has a pop when a split happens.

I mean cmon. You really dislike TSLA that much that you have to act clueless?

I guess so...

To be fair, I think they were simply pointing out that a stock split has absolutely zero impact on the fundamentals & operations of a company. A stock split simply changes the amount of shares issued with a company receiving zero new capital from it.

 

[vikings123]

The confusion seems to be more about how this affects shorts.

IMO dividends is just a legal term that needs to be used for a stock split. It does not affect shorts.

 

[SpaceCash]

look until 1800 I won't say it but this split is what we all are here for goddamnassforsure

 

[EV forever]

Here I go for a vacation for 3 days hiking in the CA Redwoods with very little cell reception because I really need to unplug....

And this happens!!! How the heck am I supposed to unplug now ?? Just spent the last hour reading as many posts as possible.

I am thrilled! I know a stock split is mostly just psychological, but feels bullish as anything! Congrats to all the longs

 

[Driver Dave]

To be fair, I think they were simply pointing out that a stock split has absolutely zero impact on the fundamentals & operations of a company. A stock split simply changes the amount of shares issued with a company receiving zero new capital from it.

yeah but then people usually understand that there is a human nature factor that causes it to pop a bit.

 

[JustSaying]

The confusion seems to be more about how this affects shorts.

Agreed , form over substance I think they call it...

 

[c041v]

For some time now, I tried to find a way more efficient way of gauging movement in the price of TSLA. I found out that the number of pages added to this thread in a day is a pretty good metric. I'm no @Artful Dodger, but I'd wager this measurement is not totally without merit.

...Looks like something happened today.

edit: Can someone provide a take on the stock split and how many shares I will have or owe if I am short? I thought 37 different takes was going to do it for me, but I'm just not sure there's enough statistical significance yet. /s

 

[Driver Dave]

What's funny about it? A stock split changes nothing relevant. There's no fundamental reason for it to affect the stock price. The only reason it is going up after hours is because people think other people might see this as an optimistic sign. It isn't, of course, so any effect will disappear over a short time (a day? a week?). But TSLA is sufficiently volatile that the ups and downs will happen and can be ascribed to any old thing. Just like the drop over the past few days is due to nothing other than random fluctuations, but people are dreaming up all sorts of reasons.

Just wait. Tomorrow the stock price will do something. No matter what it is, the "experts" will say it was because of the split announcement.

the stock is cheaper to buy. That’s not a huge deal as yes nothing changes but it is something that yes does impacts things as it usually does.

 

[uujjj2]

5 for 1 split! At long last!

 

[Chunky Jr.]

Stocks splits have tremendous psychological value. Look how many people here are giddy on the news. Many people, including myself, view it as a bullish sign by management that the stock is going to continue to climb.

 

[Christine69420]

To be fair, I think they were simply pointing out that a stock split has absolutely zero impact on the fundamentals & operations of a company. A stock split simply changes the amount of shares issued with a company receiving zero new capital from it.

I agree that the fundamentals are not affected.

But trading the company's shares IS affected.

It's easier to buy one share for small investors like me.
The cost and sizing for option traders change.
Splits are seen as bullish since it's usually done by companies increasing in value.

 

[Knightshade]

As for shorts I don't think this suddenly means that shorts will have to go find additional shares at the price they initially shorted TSLA. Their shorted price will be different when the stock split is effective, which is Aug 31st and they will have borrowed 5X shares.

Nope. Not at all how that works if it's a dividend.

If it is- they owe the person who lent them the shares 4 shares on August 28th in lieu of the 4 share dividend they'd otherwise have earned as the original stock holder.

Then the short still owes the lender ONE share, repayable whenever the short chooses to cover it essentially.

The price when they shorted is irrelevant to any of this. The fact they owe 4 shares back to the lender on a specific date is VERY relevant to it.

But I theoretically it is the same for the shorts as the price drops with the split.

Let's say they sold short 1 share recently at $1500. They have those funds.

After the dividend they will need to buy back 5 shares to close the trade but they will now be $300. (In Theory.)

Yes they will be hurt buy the rise that occurs with the split, but they don't own shares.

They have the cash from the original sale to buy back the shares.

The difference is they no longer get a choice about WHEN they repay 4/5ths of their borrow.

Being able to pick your repayment is how shorts (try) and make money. This is the opposite of that. They're FORCED to repay by a specific date. (again IF it turns out to genuinely be a dividend)

The confusion ensuing on this board from a simple stock split, is very telling. Most participants here do not have a clue. Let me put it simply: there is no way for anyone to game the system here. With the effective date declared, there is no way for anybody to get screwed. Even if you're really stupid. If you sell before the effective date you will sell the amount of shares you NOW own. If you sell on, or after, the effective date, you will be selling 5x shares, at 1/5 the price. If you are an options jockey, divide or multiply everything by 5, with those dates in mind.

Except shorts genuinely do get screwed (if it's a dividend and not a regular split) as explained above.

Which is a good thing for the stock in general.

IMO dividends is just a legal term that needs to be used for a stock split. It does not affect shorts.

No, dividend and regular split are not the same, and a dividend absolutely impacts shorts- again see above.