from Hacker News

Tesla 5-1 Stock Split

by ikarandeep on 8/11/20, 9:13 PM with 95 comments

  • by sfblah on 8/11/20, 9:36 PM

    Does anybody else share my sort of shell-shock WRT Tesla? I'm one of those who thinks its stock (and probably all the big tech names) are in a bubble. But whenever I say that I get shouted down, downvoted, told I'm an idiot, etc. I'm hoping this comment is vanilla enough to be safe... just curious if others have had the same experience.

    To be clear: I'm not interested in debating the value of Tesla. I'm curious if others have the same emotional reaction at this point. That's it. If you think Tesla is worth $1T, good. Fine by me. I don't want to debate it or be told I'm a piece of garbage.

  • by nradov on 8/11/20, 9:52 PM

    The whole notion of individual shares with prices is legacy baggage from decades ago when trading was done with paper stock certificates. What really matters is the percentage of the company you own, regardless of how that percentage is sliced into units. Some retail brokerages already offer fractional share tracing so for those investors a stock split is mostly irrelevant.

  • by dripton on 8/11/20, 9:42 PM

    Meh. Total non-event. Once upon a time I hated splits because they made record-keeping more complicated, but the online brokers do a good job of tracking basis across splits now. Once upon a time there was a real reason to do splits to enable easier purchases, but the online brokers allow fractional shares now. So, just not excited either way about splits anymore.

  • by gzu on 8/11/20, 9:37 PM

    Speaking of splits, I love how Apple’s stock split justification is: “We want Apple stock to be more accessible to a broader base of investors.” https://investor.apple.com/faq/default.aspx

    Yet it’s one of the top stocks held on Robinhood (#3 at 700,000 users)

    https://www.robintrack.net/symbol/AAPL

  • by nine_k on 8/11/20, 9:55 PM

    A more informative link [1], also on sec.gov, explaining the nature of the operation, says:

    PALO ALTO, Calif., August 11, 2020 – Tesla, Inc. (“Tesla”) announced today that the Board of Directors has approved and declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors. Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.

    [1]: https://www.sec.gov/Archives/edgar/data/1318605/000156459020...

  • by Xcelerate on 8/11/20, 9:31 PM

    I don’t really understand stock splits. Is the only point to allow people to buy shares who could previously not buy because one share was too expensive? If so, why not just introduce fractional shares into the stock market with some fixed point number of decimal places? Or just keep track of ownership fraction (e.g. 0.0043% of the company)?

  • by hmate9 on 8/11/20, 9:50 PM

    TSLA stock is up over 7% after hours now. ~$15 billion of "value" created out of thin air. Sounds ridiculous.

  • by caiobegotti on 8/11/20, 9:56 PM

    For reference, here's a short amusing thread about the original Tesla IPO (even replied by Musk himself): https://twitter.com/Mark_Goldberg_/status/129281818458888601...

  • by firekvz on 8/11/20, 9:40 PM

    Hope you guys had some tesla calls :p