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TSLA Stock Split

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Buckminster

Well-Known Member
Aug 29, 2018
10,106
50,162
UK
Video from DaveT with the pros and cons:
I would prefer 100:1. Room for growth and would make option gambling affordable. Having said that, having a Berkshire style high price would be pretty cool.

Announcing a split on battery day / shareholders day would be exciting.
 
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I'm saving about $100 each month from my wages. So with the current price I need to save for 10 months to be able to buy one more share. Problem is - can I buy TSLA for $1000 in 10 months? Don't think so. I know Robinhood offer partial shares but I don't live in the US so not an option.

So lately I've been buying NIO :rolleyes:

But if we get a stock split :D

Edit: Copied from main thread.
 
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The primary reason I'm rooting for a stock split is to make options affordable. Fractional shares are available to almost everyone, but fractional options are almost unheard of (I've read some exchanges have "mini" options where each contract represents 10 shares, but they're rare).

I haven't yet traded options because I'm unable to take on the risk of having $140,000 worth of stock assigned if something goes wrong.
 
10:1 is too light. 69:1 or 420:1 would be awesome.

Actually, I would prefer to see a second class of non-voting shares be issued, say TSLAB. This would concentrate voting rights among serious investors. The non-voting shares would have, say, a 100:1 conversion options. That is, Tesla will allow non-voting shareholders to exchange 100 non-voting shares (TSLAB) for 1 voting share (TSLA). This provision links the market price of both options so that they stay close to the conversion rate.

We know that Musk is very keen to hold substantial control of Tesla. His share of TSLA shares outstanding would be the critical measure of influence. The TSLAB shares would only potentially dilute the share of TSLA if somehow TSLAB shareholders found it important to convert for the vote. But this is really unlikely. So I could see Elon going for this plan.

This solution also gets around the risk of needing to do a reverse stocks split if things went badly for the company. Suppose TSLAB were at risk of having a share price below $1. Tesla would be able to buyback about 100 TSLAB shares on the open market with 1 TSLA share, until the price is well above $1. If necessary, Tesla remove all TSLAB shares from circulation, which is essentially a 1:100 reverse split.

Another point in favor of a stock split or non-voting share issue is that smaller denominations are more useful for stock-based employee compensation. All but the mostly highly compensated might do well to accumulate TSLAB shares. Of course, an employer can issue fractional share grants, but this comes at reduced liquidity for the employee. The employee cannot simply sell her fractional shares in the stock market, but must allow her employer to convert fractional shares to cash. If I were a Tesla employee, I think I would prefer to have shares in small denomination that I could liquidate in the market.
 
Stock splits work .... I've seen this time and time again. Ask average "investors" what a P/E ratio is and enjoy the glazed look that comes over their faces. Many "investors" only look at the price and make a determination as to how "expensive" a stock is. Just watch ... TSLA will be "CHEAP" all of the sudden after the 10:1 split that I think is coming very soon. This split will help propel the stock to new heights ... after all, $1700 - 2000 is a BIG increase ... but $170-200 ... not so much.

Yes, to any informed investor its all the same but you might be surprised how many "uninformed" investors there are out there.

Cheers to the longs
 
Here's something worrying .. I just called my UK broker to ask why my pre-split share count has not been updated, whereas the post-split share price has. I’ve just been told that they have chaos going on due to the number of frustrated APPL and TSLA clients not yet receiving the new allocations.

BUT .. I cannot sell anything I don’t yet have, even if the SP tanks .. possibly causing pent up sell action if many others are in the same boat and none of us can sell until further notice.

Which leaves me exposed to the will of the market, and unable to act.

The broker does not allow shorting, so I couldn’t even sell short what I ought to have been allocated.

I joked that maybe this farce has been caused by MM’s / manipulators selling naked shorts and being unable to produce the actual shares .. and he laughed saying ‘you maybe onto something, but I can’t possibly express a firm opinion’


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3:1 confirmed:

Summary of the Proposed Amendment

The following is a summary of the proposed Authorized Shares Amendment, and is qualified in its entirety by reference to the full text of the Amended Certificate as set forth in Appendix A, specifically Section 4.1 thereof (with additions shown as underlined and deletions shown as struck through).

Our certificate of incorporation currently authorizes us to issue 2,100,000,000 shares, consisting of 2,000,000,000 shares of Common Stock, par value $0.001 per share, and 100,000,000 shares of Preferred Stock, par value $0.001 per share. The Authorized Shares Amendment provides for an increase in the number of authorized shares of Tesla’s common stock from 2,000,000,000 shares to 6,000,000,000 shares. The Authorized Shares Amendment would not change the total number of authorized shares of Preferred Stock.

Reasons for the Proposed Amendment

The primary purpose of the Authorized Shares Amendment is to facilitate a 3-for-1 split of our common stock in the form of a stock dividend (the “Stock Split”). As of June 6, 2022, we have 1,036,390,569 shares of common stock outstanding, and the current number of authorized shares of our common stock is 2,000,000,000, which is insufficient to effectuate the Stock Split. Our Board intends to approve the Stock Split, subject to and contingent upon stockholder approval of the Authorized Shares Amendment.

Our success depends on attracting and retaining excellent talent, not only through providing a respectful, safe, inclusive and equitable workplace, but also through offering outstanding benefits and highly competitive compensation packages. 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. We believe the Stock Split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value. 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.

Except for shares reserved for issuance under existing equity compensation plans and shares that would be issued pursuant to the Stock Split, the Board has no current plans to issue additional shares of common stock. As such, the Authorized Shares Amendment represents a request for a proportionate increase in the number of authorized shares of common stock based on our planned Stock Split.

https://www.sec.gov/Archives/edgar/data/1318605/000156459022022992/tsla-pre14a_20220804.htm
 
I had hoped for 10-for-1, bringing the stock price down to a more affordable $70/share or so at today’s price.

Amazon recently had a 20-for-1 split, bringing the price down to about $120/share, though it’s dropped since then with the current ongoing market rout. So such split ratios are not just a pipe dream.