Please be advised of the upcoming Tesla, Inc. (TSLA) 1st stock split that is going to take place as per the following schedule:
• Ex-Date: Aug 31st, 2020. Common shares will trade at the new split-adjusted price.
Important
implications of the TSLA Stock Split
• The quantity of shares of each client’s position will multiply by five
• Post-split, the open price of each position will be adjusted, which will be
the original price divided by five.
• The estimated post-split price will be 1/5th of the closing price on 28th of
August
• All pending orders at the time of the split (Buy Limit, Sell Limit, Buy Stop,
Sell Stop, Buy Stop Limit and Sell Stop Limit) will be deleted.
Please note: All open and pending Demo account TSLA orders will be deleted as a result of the stock split.
What is a
stock split?
A stock split is a corporate action taken by companies that have seen their
share price increase to levels that are either too high or are beyond the price
levels of similar companies in their sector, to divide their existing shares
into two or more shares.
Why do
stocks split?
The primary motive is to make the shares more affordable to small investors
even though the underlying value of the company has not changed. Therefore,
after bringing in a record Q2 revenue, Tesla would like its stock to be more
accessible to a broader base of investors.
What is
the split ratio?
Tesla also announced it will split its stock in a 5-to-1 offering.
What will
this split mean to investors?
Each share of Tesla stock that an investor owns before Ex-Date (Aug 31st, 2020)
will be eligible for stock split. Investors will receive four additional shares
and the stock price will be one-fifth.
Stop Loss and Take Profit set on all open position will be DELETED.
Here is an example:
If an investor owns 100 shares and the market price is $1600, after 5 for 1
stock split, the investor will own 100*5= 500 shares and the estimated
post-split price would be $1600/5 = $320.
All pending orders (Buy Limit, Sell Limit, Buy Stop, Sell Stop, Buy Stop Limit, Sell Stop Limit) will be DELETED.
Does the
5-to-1 stock split mean the value of my TSLA shares will increase four times?
Unfortunately, not. As stated in the above example, the increase in the number
of stocks means every share is now worth less than its previous value,
precisely, it’ll be 1/5th the previous value.
How do
stock splits affect short sellers?
Stock splits do not affect short sellers in a material way. There are some
changes that occur as a result of a split that affects the short position, but
they don’t affect the value of the short position(s).
