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

[Kross]

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]

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]

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)."

 

[Kross]

Neither Tesla nor the NYSE care one bit about what you hold. You need to call your brokerage.

That explained a part of my question; the tracking for it is done by the brokerage firm. Thanks!

 

[Bill Price]

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?

 

[ralph142]

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]

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]

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]

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]

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.