Investing General Discussion

TJT · Aug 27, 2020

From TD Ameritrade.

How TSLA’s 5-for-1 stock split can affect your account

Tesla Inc. (TSLA) recently announced a 5-for-1 stock split. The split takes effect on August 31 for each shareholder of record on Aug. 21. The stock split happens automatically in your account and you are not required to do anything. TD Ameritrade does not charge a fee for this type of a stock split.

If you own shares of TSLA before the market open on Aug. 31 you will own five shares for every one you hold, and the stock price will be reduced to one-fifth of its value at the start of trading on Aug. 31. For example, if you hold 100 shares of TSLA trading at $1,500 per share, after the split you will own 500 shares valued at $300 per share. Likewise, if you own 1 options call controlling 100 shares with a strike price of $1,500, after the split you would own 5 contracts and control 500 shares at a $300 strike price.

If you sell TSLA shares after the record date of Aug. 21 for TSLA but before Aug. 31, you will sell them at the pre-split price. You will not be entitled to the split shares. For example: If on the last business day of trading TSLA, Aug. 28 you sell 100 TSLA shares for a pre-split market price of $1,500 per share you will receive $150,000. You will not receive any split shares.

If you buy TSLA shares after the record dates but before Aug. 31, you will purchase shares at the pre-split price. Following the split, you will receive the additional shares resulting from the stock split. For example: If on Aug. 26 you buy 100 shares (and hold them through the open on Aug. 31) at $1,500 per share, you will pay $150,000. You will receive 400 additional shares after the stock split, and the price will be reduced to the post-split price.

So if you bought before the split you get the shares whatever, but if you bought pre-split you don't "get" the split you auto purchase through reconciliation the difference... Interesting.

Sanrith Descartes · Aug 27, 2020

TJT said:
Araysar's post above you,

"If you buy AAPL or TSLA shares after the record dates but before Aug. 31, you will purchase shares at the presplit price. Following the split, you will receive the additional shares resulting from the stock split."

I read that. It doesnt make sense to me based on the AAPL and Nasdaq websites but I am not saying yay/nay. Why have a record date if you can keep trading after said record date?

Sanrith Descartes · Aug 27, 2020

I cant wrap my head around why bother having a record date a week prior UNLESS it is strictly to deal with options expiry that week. The only thing that makes sense is it having to do with options. With dividends there is a one day lag because it is just account for the dividend payment to the owner of record.

If you exclude options from the equation then it all makes sense (per what TD said). Whomever actually owns the stock Fri at the close gets the split shares and Monday the price gets cut and everything goes on as normal. Weekly options expiry is where it would get muddy because they dont expire at the market close they expire at 11:59pm Friday

Sanrith Descartes · Aug 27, 2020

Khane said:
Everyone talking about TSLA but I'm feeling pretty great about my GLW, PPG AND PYPL plays

I remember missing a limit order on PYPL to buy at like 160 or so by pennies and it has never looked back since. Makes me a sad panda.

TJT · Aug 27, 2020

Well as long as I end up with my 15 shares and not the 3 I bought but a decrease in price by a factor of 5 I don't particularly care what the mechanism is.

Sanrith Descartes · Aug 27, 2020

I ran my weekly "sell covered call options on DAL expiry tomorrow" on the morning gap up. It has worked the last 3 or 4 Thursdays. Hopefully my streak continues.

Edit : And I am out. In at 0.35 out at 0.5 just like clockwork.

Gravel · Aug 27, 2020

Sanrith Descartes said:
Well this came out of left field...
Walmart partners with Microsoft for TikTok bid

REUTERS 12:09 PM ET 8/27/2020

Aug 27 (Reuters) - Walmart Inc(WMT) is partnering with Microsoft Corp(MSFT) in the software maker's bid for Bytedance-owned TikTok, the world's largest retailer said on Thursday.

ByteDance has been in talks to sell TikTok's North American, Australian and New Zealand operations which could be worth $25 billion to $30 billion to companies including Microsoft(MSFT) and Oracle, people with knowledge of the matter have told Reuters.

U.S. President Donald Trump has demanded that China's ByteDance, which owns TikTok globally, sell its U.S. operations, citing potential national security risk due to the vast amount of private data the app is compiling on U.S. consumers.

"We are confident that a Walmart(WMT) and Microsoft(MSFT) partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators," the retailer said in a statement.

The two companies are two years into a five-year partnership as part of the retailer's push for wider use of cloud and artificial intelligence.

Walmart (WMT) said TikTok's integrated e-commerce and advertising capabilities in other markets "is a clear benefit to creators and users in those markets."

The retailer's shares were up about 4.4% on the news.

Seems like big business still doesn't understand kids. By the time this shit went through, they will have long since moved on.

Any value in TikTok is dead already.

Sanrith Descartes · Aug 27, 2020

Gravel said:
Seems like big business still doesn't understand kids. By the time this shit went through, they will have long since moved on.

Any value in TikTok is dead already.

While not disagreeing, remember the same mantra was said about FB. Once the kids move on its dead. Instead, non-kids ended up taking it over. We shall see.

Wingz · Aug 27, 2020

SHLL taking an ass pounding right now..what a dip. Bought some 33.90 at this time

Sanrith Descartes · Aug 27, 2020

Wingz said:
SHLL taking an ass pounding right now..what a dip. Bought some 33.90 at this time

Dont see any news on social media. Most likely the crowd taking the profits at $40

LCA got crushed too. Profit taking most likely.

LachiusTZ · Aug 27, 2020

TJT said:
Sanrith Descartes

Please tell me if I am a retard with poor reading comprehension. I understand that holder of record get the split here but there are articles from CNN finance and Barrons both saying the exact opposite. If I am indeed a retard I'll take my ~$1000 bucks now.

http://archive.is/P9OEs

From the article:
The record date matters, but there is no arbitrage for investors to exploit. When someone sells Tesla stock after August 21 and before August 28, they sell the stock dividend as well.

Sanrith Descartes · Aug 27, 2020

LachiusTZ said:
From the article:
The record date matters, but there is no arbitrage for investors to exploit. When someone sells Tesla stock after August 21 and before August 28, they sell the stock dividend as well.

Thanks. Its the only thing that makes sense, it was just not worded clearly in places I looked (at least to me).

LachiusTZ · Aug 27, 2020

Lol, oh this Tesla train...

Reversion to the mean is going to crush some dreams

TJT · Aug 27, 2020

LachiusTZ said:
Lol, oh this Tesla train...

Reversion to the mean is going to crush some dreams

I told you the Robinhood WSB devious plan all revolves around the idea that they can sell a stock at the current sucked price, keep the split difference and keep you holding the bag with a stock that returns to post-split price instantly and you're boned.

Loss porn will be fantastic.

Gravel · Aug 27, 2020

LachiusTZ said:
Lol, oh this Tesla train...

Reversion to the mean is going to crush some dreams

Yeah, was talking to my mom a couple months ago and her boyfriend is now a millionaire, and she had mentioned he had a significant amount of Tesla stock. He's in his mid-50's though, so I'm hoping he decides to divest a bit of it elsewhere.

But considering how long ago that was, I'm kind of curious where he's at now.

Hateyou · Aug 27, 2020

Gravel said:
Yeah, was talking to my mom a couple months ago and her boyfriend is now a millionaire, and she had mentioned he had a significant amount of Tesla stock. He's in his mid-50's though, so I'm hoping he decides to divest a bit of it elsewhere.

But considering how long ago that was, I'm kind of curious where he's at now.

LachiusTZ · Aug 27, 2020

We keep saying it, but it has to revert to the mean at some point?... Right? Lol

Sanrith Descartes · Aug 27, 2020

LachiusTZ said:
We keep saying it, but it has to revert to the mean at some point?... Right? Lol

TJT · Aug 28, 2020

LachiusTZ said:
We keep saying it, but it has to revert to the mean at some point?... Right? Lol

Araysar · Aug 28, 2020

Today is the day we get rich, fellow Tesla enthusiasts (well, after closing bell)

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