Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

What happens in the "gap week" before TSLA stock splits?

Kross

Member
Jun 12, 2017
125
52
Maryland, U.S.
I've been wondering this with the recent announcement of TSLA 1-to-5 stock split. So, here's what I understand:
  • Anyone holding TSLA stock end of day 21st is eligible for 1-to-5 split
  • Stock splits on 31st of August
  • Clearly this is driving up the stock value as we head into Friday the 21st
  • But then there is a gap-week (Mon, 24th to Fri, 28th) before the stock is actually split
  • And during this gap-week, there is no incentive (for those looking to get in pre-split; mostly the ones driving up the value) to buy the TSLA stock
My question is, what happens in this gap week?

If no new stockholders next week would be eligible for the stock split, does this mean that the stock value will begin dropping come Monday 24-Aug, since people won't be dying to get in before the split anymore? Wouldn't this make it silly for folks to keep buying stock at the currently insane $2k price?

Also, how will Tesla/NYSE monitor who had the stock when? What's to stop me from selling my stock on Monday 24th and how will Tesla/NYSE know not to split that stock on the 31st for the owner that owns it all next week if I had owned it this entire week?
 

glide

Active Member
Jun 6, 2018
3,289
3,366
USA
I've been wondering this with the recent announcement of TSLA 1-to-5 stock split. So, here's what I understand:
  • Anyone holding TSLA stock end of day 21st is eligible for 1-to-5 split
  • Stock splits on 31st of August
  • Clearly this is driving up the stock value as we head into Friday the 21st
  • But then there is a gap-week (Mon, 24th to Fri, 28th) before the stock is actually split
  • And during this gap-week, there is no incentive (for those looking to get in pre-split; mostly the ones driving up the value) to buy the TSLA stock
My question is, what happens in this gap week?

If no new stockholders next week would be eligible for the stock split, does this mean that the stock value will begin dropping come Monday 24-Aug, since people won't be dying to get in before the split anymore? Wouldn't this make it silly for folks to keep buying stock at the currently insane $2k price?

Also, how will Tesla/NYSE monitor who had the stock when? What's to stop me from selling my stock on Monday 24th and how will Tesla/NYSE know not to split that stock on the 31st for the owner that owns it all next week if I had owned it this entire week?
Neither Tesla nor the NYSE care one bit about what you hold. You need to call your brokerage.
 

Kross

Member
Jun 12, 2017
125
52
Maryland, U.S.
Ended up finding this answer in some trading forums:

"You can buy and sell from now through next week as totally normal. Any shares or options owned by anyone at the close next Friday (28th) will under go the split for the following Monday. However, if you want to get paid dividends on shares you own pre-split, you must own them by the end of the record date (21st)."
 

Bill Price

Member
Sep 23, 2018
503
608
Indianapolis
Ended up finding this answer in some trading forums:

"You can buy and sell from now through next week as totally normal. Any shares or options owned by anyone at the close next Friday (28th) will under go the split for the following Monday. However, if you want to get paid dividends on shares you own pre-split, you must own them by the end of the record date (21st)."

I've owned Tesla stock since they IPO'd June 29, 2010 when I purchased 2,000 shares. To date, I've never received a dividend that I know of. I think you are mistaken in your belief that Tesla pays dividends?
 
  • Informative
Reactions: dhrivnak

ralph142

Member
Mar 8, 2019
360
308
bellingham, wa
Didn’t Tesla announce the split as a dividend? So theoretical the only split will be from the ex div date? That’s what’s confusing people perhaps. Can’t really work like that can it?
 

Kross

Member
Jun 12, 2017
125
52
Maryland, U.S.
Didn’t Tesla announce the split as a dividend? So theoretical the only split will be from the ex div date? That’s what’s confusing people perhaps. Can’t really work like that can it?

From what I gathered it's a stock split - you'll end up with +4 shares for every 1 share you own with the total value staying the same.
 

Kross

Member
Jun 12, 2017
125
52
Maryland, U.S.
I've owned Tesla stock since they IPO'd June 29, 2010 when I purchased 2,000 shares. To date, I've never received a dividend that I know of. I think you are mistaken in your belief that Tesla pays dividends?

I'm still unsure about this whole thing; still researching. But, here's my guess:

The deadline for today (21st) in the context of the stock-split is specifically for calculation of a dividend pre-split (whether or not it's paid or how it's paid, I don't know). Wereas next week Friday is the deadline to get stocks for the split itself.
 

ralph142

Member
Mar 8, 2019
360
308
bellingham, wa
From what I gathered it's a stock split - you'll end up with +4 shares for every 1 share you own with the total value staying the same.

yes indeed, but they called it a dividend. I don’t think there can be a gap, you either own xx shares next Friday and get four new ones for each, or not. The ex div date isn’t relevant.
 

Travelandlive

Member
Sep 22, 2019
31
17
Tucson
They call it a dividend, but it isn't the dividend you are talking about.
If you purchase prior to the split, you will get the 5 to one stock split no matter what.

Just think of it as a 100 dollar bill being broken down to 20s ( a 4 to 1 split) it's going to be worth the same together in small denominations.

So you'll either buy it before it splits and have it split 5 ways or after it splits, to which you'll just be buying the stock at the 5 way split price.

There is no in between to where youll get screwed and not get the split stock.
 

About Us

Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.

Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


SUPPORT TMC
Top