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Tesla 5-1 Stock Split

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Re: Tesla 5-1 Stock Split

#41

Post by bitxbit »

sfblah wrote: post #12

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 ot…

On HN and elsewhere, I had same reactions. There’s not a lot of rational debate. Stock is mainly driven by short-term OTM options.

Re: Tesla 5-1 Stock Split

#42

Post by retzkek »

gzu wrote: post #14

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

Robinhood lets users buy fractional shares [1]. What's the average and median share holding per user?

1. https://robinhood.com/us/en/support/articles/fractional-shar...

Re: Tesla 5-1 Stock Split

#43

Post by sfblah »

jeanvalmarc wrote: post #40
o-__-o wrote: post #18

Earlier quoted context omitted.

If they can successfully enable fully automated self driving cars, then I think the value is entirely justified. See FaceBook. Disclaimer: I bought Tesla calls today and now assume I’m rich so your opinion may differ

Narrator: they can't.

Well, to be fair, I hate driving. So if they do, I'll buy one. Simple as that. I'm waiting!

Re: Tesla 5-1 Stock Split

#44

Post by valuearb »

gzu wrote: post #14

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

“Accessibility” is always a bogus reason nowadays. Stock commissions are dirt cheap so there is little reason to buy in lot sizes anymore. If you have $320,000 in your account you can buy a single share of Berkshire Hathaway for less than a $10 commission.

Stock splits are just a low grade attempt to pump up the stock price.

Re: Tesla 5-1 Stock Split

#45

Post by [deleted] »

imajoo wrote: post #31
gzu wrote: post #14

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

They have 4.2B shares outstanding with 64% being held by institutions. 700k people owning shares is a drop in the bucket. https://www.nasdaq.com/market-activity/stocks/aapl/instituti...

[deleted]

Re: Tesla 5-1 Stock Split

#47

Post by [deleted] »

sfblah wrote: post #12

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 ot…

[deleted]

Re: Tesla 5-1 Stock Split

#48

Post by arthurcolle »

abfan1127 wrote: post #11
Xcelerate wrote: post #2

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)?

there was a time when you couldn't buy fractions of a share. Then it made sense to keep shares "lower" for smaller increments of share purchases. But now, most exchanges that I'm aware of allow fractional share purchases. Fractional share ownership may affect voting rights. I too would like to know "why" Tesla would opt for this... seems like they have more important things to do.

The exchanges don't allow it, the brokers do.

Re: Tesla 5-1 Stock Split

#49

Post by webXL »

the-dude wrote: post #22
sfblah wrote: post #12

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 ot…

You are not alone. Regular (non-tech) stock market analysts are comparing current valuations with the dot-com bubble. But there is no TINA ( https://www.investopedia.com/terms/t/tina-there-no-alternati... ). The money needs to go somewhere.

So there is an alternative?

Re: Tesla 5-1 Stock Split

#50

Post by betterunix2 »

Xcelerate wrote: post #2

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)?

Liquidity rules are the main reason. Even Berkshire Hathaway had to give in and create the Class B shares in response to pressure from institutional investors constrained by liquidity requirements. Brokerages are also less willing to allow margin trading on equities with low liquidity because of the risk that a customer will be unable to sell their assets to cover margin calls.

As for fractional shares, keep in mind that these are a creation of brokerages, they are not universally available, and they create complications with shareholder rights (e.g. voting).

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