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The New Coffee Room

  1. TNCR
  2. General Discussion
  3. Tesla stock splitting 5/1

Tesla stock splitting 5/1

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  • HoraceH Offline
    HoraceH Offline
    Horace
    wrote on last edited by Horace
    #4

    they wouldn't in a perfectly rational market. But those don't exist.

    Education is extremely important.

    1 Reply Last reply
    • HoraceH Offline
      HoraceH Offline
      Horace
      wrote on last edited by Horace
      #5

      TDAmeritrade's trading software has updated aapl's price to reflect the post-split reduction. But they haven't yet updated the number of shares. Sad looking numbers right now.

      I guess TDAmeritrade has control over when to impose the share increase (as long as it's before open Monday) while the price decrease is handled by some other entity.

      Option strike prices haven't been converted yet either, I suppose that may be controlled by yet a third entity. Everybody has a deadline of market open tomorrow.

      Education is extremely important.

      1 Reply Last reply
      • jon-nycJ Online
        jon-nycJ Online
        jon-nyc
        wrote on last edited by
        #6

        Price comes from exchanges 'corporate actions' come from DTCC, not surprised they are slightly out of sync.

        Only non-witches get due process.

        • Cotton Mather, Salem Massachusetts, 1692
        1 Reply Last reply
        • jon-nycJ Online
          jon-nycJ Online
          jon-nyc
          wrote on last edited by
          #7

          @Klaus Even for the Dow it shouldn't matter as they adjust for splits.

          Only non-witches get due process.

          • Cotton Mather, Salem Massachusetts, 1692
          KlausK 1 Reply Last reply
          • jon-nycJ jon-nyc

            @Klaus Even for the Dow it shouldn't matter as they adjust for splits.

            KlausK Offline
            KlausK Offline
            Klaus
            wrote on last edited by
            #8

            @jon-nyc Do they? I vaguely remember that the weight of a stock in the DJ is determined by the absolute value for one stock.

            jon-nycJ 1 Reply Last reply
            • KlausK Offline
              KlausK Offline
              Klaus
              wrote on last edited by
              #9

              The value of the index is the sum of the stock prices of the companies included in the index, divided by a factor which is currently (as of June 2020) approximately 0.1458. The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split.

              OK, so if a stock split occurs, the weight of the company in the DJ changes and all index funds etc. have to reshuffle their composition. Silly.

              1 Reply Last reply
              • jon-nycJ Online
                jon-nycJ Online
                jon-nyc
                wrote on last edited by
                #10

                But they don't have to change their composition. The index change matches the split perfectly. So if you needed X shares of TSLA before the split, you'll need 5x after.

                Only non-witches get due process.

                • Cotton Mather, Salem Massachusetts, 1692
                KlausK 1 Reply Last reply
                • KlausK Klaus

                  @jon-nyc Do they? I vaguely remember that the weight of a stock in the DJ is determined by the absolute value for one stock.

                  jon-nycJ Online
                  jon-nycJ Online
                  jon-nyc
                  wrote on last edited by
                  #11

                  @Klaus said in Tesla stock splitting 5/1:

                  @jon-nyc Do they? I vaguely remember that the weight of a stock in the DJ is determined by the absolute value for one stock.

                  It is, but they adjust for splits.

                  Only non-witches get due process.

                  • Cotton Mather, Salem Massachusetts, 1692
                  1 Reply Last reply
                  • jon-nycJ jon-nyc

                    But they don't have to change their composition. The index change matches the split perfectly. So if you needed X shares of TSLA before the split, you'll need 5x after.

                    KlausK Offline
                    KlausK Offline
                    Klaus
                    wrote on last edited by
                    #12

                    @jon-nyc said in Tesla stock splitting 5/1:

                    But they don't have to change their composition. The index change matches the split perfectly. So if you needed X shares of TSLA before the split, you'll need 5x after.

                    Not if the index is computed as I quoted above (which is from Wikipedia).

                    If the stock prices are s1 to s30, then the index value is computed as
                    (s1+...+s30)/0.1458. Now if, say, s1 is split by two, then the factor is adjusted such that the split doesn't change the value of the index (that is, solve (0.5*s1 + s2 + ... + s30) / newFactor = (s1+...+s30)/0.1458 ), but still the weight of s1 is halved, so an index funds would have to sell half of it's s1 assets.

                    1 Reply Last reply
                    • HoraceH Horace

                      Do own any 89th?

                      89th8 Online
                      89th8 Online
                      89th
                      wrote on last edited by
                      #13

                      @Horace said in Tesla stock splitting 5/1:

                      Do own any 89th?

                      Yeah I bought 6 shares near the start of 2020, and am up about 190% since then. 🤷‍♂️

                      1 Reply Last reply
                      • HoraceH Offline
                        HoraceH Offline
                        Horace
                        wrote on last edited by
                        #14

                        Nice.

                        Education is extremely important.

                        1 Reply Last reply
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