Even if you put an order in now, it wonāt be processed until Monday anyway.
The price could go either way on Monday, so itās difficult to answer your question.
If you think the price will go up then I think getting a market order in now will reserve your place in the queue to buy on Monday so you should get a cheaper price.
Iām a bit out of my depth with this question so NOT FINANCIAL ADVICE!
May I ask how much you receive in cash for your 0.05 shares that was sold after your split
so my liquidated stock was in my available funds which I have since withdrawn to my bank. it was around Ā£71.
My guess is that the process has not been fully completed. I canāt be sure becuase I was asleep, but pretty sure this happened after the market closed. So will probably need to wait until Monday until the rest of our aggregate fractionals can be sold. Just guessing here.
@daindian But a stock split is utterly meaningless. People are somehow deriving value from nothing.
I think they have given you the cash amount based on the post split value.
itās not about nothing, it makes the stock accessible to alot more people, if you are a small time investor one share in tesla at 500 odd is cheaper than one share at 2200 odd. plus in my case a 200 dollar increase for example means 1200 profit as opposed to what it would of been with 1 share
My calculation suggests that you shouldāve received $154.74/Ā£115.89.
I donāt think we know the definitive pre-split sell price yet, but I think it is $2,210.59, making the post-split sell price $2,210.59 / 5 = $442.118. This may be rounded to $442.12, but letās ignore that complication for now. We have:
Pre-Split - 0.27 shares x $2,210.59 (pre-split price) = $596.8593 in shares
Post Split - 1 share x $442.118 (post-split price) + 0.35 shares sold x $442.118 = $442.118 in shares + $154.7413 in cash = $596.8593
We also donāt know what date and time Trading 212 will use for the exchange rate. However, if we assume the current rate of 1.3552, then $154.7413 is Ā£115.8937237866986.
Yea it could go either way! I think Iām gonna wait for a few more thoughts, but maybe itās better to be safe and just put in an order beforeā¦
It might make it more accessible, although most people have access to fractional shares these days.
Everything you said about it being cheaper and having the potential to make more profit is just wrong. Dead wrong.
I hope so. Feels weird that they donāt process all in one go. Unless they are short of physical stock to be sold in the market after close and cannot distribute.
@daindian, for 0.05 fraction of shares, I thought you should be getting ~Ā£82 and not Ā£71. I guess thatās still better than my 0.07 where I only received Ā£42.
Pretty sure itās because fractional shares donāt actually exist. Itās just a broker construct. Behind the scenes there must be a full share making up our fractionals. And itās probably more complex than that. There is no way they are going to screw you out of money.
This seems slightly low. I calculate Ā£82.78.
Check your pie free funds. For some reason it doesnāt show as a deposit.
Edit: The deposit was the profits, the free funds in your pie is the principal amount.
pls elaborate then? for simplicity sake if a buy 1 tesla share at 2000 and then it gets to 2200 thatās 200 profit excluding the exchange rate. another 200 increase means 400 on the one share. surely the same way post split I have 6 shares at average cost of 400. if the price then goes up 200 its 200x6 I.e 1200 profit?
I think youāre using 6 instead of 5.
I think there is some truth to what youāre saying, but it isnāt as easy for a $400 stock to increase by $200 (a 50% increase) as it is for a $2000 stock (a 10% increase). However, I do agree that it is likely that a $400 stock will increase by a higher percentage over the same time period than a $2000 stock because it is more accessible to a larger number of investors. And, although it absolutely isnāt the case, it āfeelsā cheaper!
So how a share derives itās value is Market Capitalisation / Number of shares.
Market cap is the value if the company. Tesla is worth about $400b.
So before the split we have $400 billion divided by 186 million shares. This gets our price about $2200 (rounding errors).
After the split there are now 931 million outstanding shares. $400 billion divided by 931 million gets our price of $450 (rounding errors again)
Now what you are saying is, that because the price is lower, it has more potential to double to say $900.
This is also saying the market cap will increase to $800 billion. A full 100% increase. This would hold true for the $2,200 price.
The percentage of movement in market capitalisation is the same, therefore movements in either price will be the same in percentage.
Your example is comparing a 100% move to a 10% move.
yeh I know it was all hypothetical looking more long term. also reason I used 6 was cos the 1.2 holding I had became 6
Iām not an expert on this, so forgive me if Iām mistaken. However, isnāt the formula actually:
Number of Shares * Share Price = Market Capitalisation
So, the price determines the market capitalisation, the market capitalisation doesnāt determine the price.
The price is only controlled by whatever somebody is willing to pay for a share. If more people can afford a share and it āfeelsā cheaper (even though it isnāt really) then that will drive both the price and the market capitalisation up.
I can not reconcile as I donāt know how much āfree cashā I had before the split. Unless there is a history of it, it will probably impossible to trace back.
Nevertheless, not sure your understanding hold true as @daindian only have Ā£71 of free cash which he/she withdrew where she should have received Ā£82 in total regardless of whether itās in the form of deposit or āfree cashā.
How ever you mix the formula up, itās all the same thing.
Let me put it this way, I have a cake and I ask you to pay me Ā£2 for a slice. Well in order to know what kind of a deal you are getting, you need to know the size of the slice (Number of shares outstanding) and the size of the cake (Market cap).