Tesla stock split

my CFD opened just got closed. same for the Invest tesla share. is this temporary ?

Itā€™s concerning that you donā€™t even know what weā€™ve been discussing.

That is all weā€™ve been discussing.

Dude, they are the same thing. That is what you said you totally disagree with. Iā€™m losing brain cells here.

Not to flex or anything, but you are not talking to a fellow newbie. I can turn on my leader badge if you want. Not that that really says anything.

Well I did say at the beginning that I might be wrong.

Itā€™s interesting that absolutely nobody has agreed with either of us yet.

Can anybody settle the argument?

To be clear, all Iā€™m saying is:

  • The share price comes from the order book and it determines the market capitalisation
  • The market capitalisation is the result of a calculation (share price x number of shares). It cannot be changed directly.

Does this ā€œnewbieā€ get a ā€œleader badgeā€ if Iā€™m right?

@nickspacemonkey, what part of this do you think is wrong?

You are correct in that the price comes from the market (order book). And that price x number of shares determines market cap. But the market cap / number of shares is the same. Because this is how a company IPOs. The value of the company is determined by itā€™s intrinsic value and the number of shares gets a determined price. So itā€™s the same thing. Every share has a nominal value.

You guys seriously need to learn the stock market and maths , go check out investopedia if you doesnā€™t have anything to read , splitting share doesnā€™t increase the market cap or value , it just make ppl can buy it cheaper.
Well, market cap = share price x shares outstanding .
You all just know to say this but doesnā€™t know what it means.
The shares outstanding increases five times but at the same time share price is reduced to 1/5, so basically there is nothing change in value or market cap. Primary school is good for learning .
Easy example , A cake worth 5 dollar, you split it into five pieces with each price per dollar . So now what? If you doesnā€™t have FIVE dollar, you can buy the small piece cake with one dollar, you can still eat the cake. They are the same cake . Just ppl who got 5 dollar managed to pay and eat the whole cake. When more ppl buy the small piece cake with one dollar, what happen next ? Market cap of the cake increase because share price increases as more ppl afford to buy the small piece cake now.
So in conclusion, splitting doesnā€™t affect the value . It is the consequence after splitting , either increase or decrease, its always supply and demand in market.

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@chen, I challenge you to quote one thing that @nickspacemonkey or I have written today that suggests that either of us donā€™t have a full understanding of this.

We are arguing over something much more subtle.

And this actually backs up one of my earlier points. Thanks!

What does that mean?

What does that mean?

What does that mean?

What does that mean?

Did Trump write your last post? :grinning:

ā€œmaket cap / number of shares = share priceā€ is the same as ā€œshare price * number of shares = market capā€

When a company is private, how much do you think they are selling their shares for? The value of those shares is determined by the value of the company. Which is the market cap. In this stage it is not determined by a market. The price is set to itā€™s nominal value. In other words how much the company is currently worth. It is then sold at this value to the different institutions who will then float the shares on an exchange. Only then will the market determine the share price, which is just a reflection of the overall value of the comapany. Meaning they are the same thing.

Iā€™ve already agreed several times that you can calculate the Share Price using this formula. However, you canā€™t change the Market Capitalisation directly, so you canā€™t change the Share Price. Admittedly, I didnā€™t express this very well in my original post, but I think Iā€™ve clarified my position since then.

Yes, for an IPO, the initial Share Price is determined by the fundamental value of a company divided by the Number of Shares. This fundamental value isnā€™t technically the Market Capitalisation, although I guess at the instant the IPO starts they both have the same value for a brief moment. However, as soon as the shares are available for sale, the market determines the Share Price and therefore the Market Capitalisation. The Share Price/Market Capitalisation can be completely disconnected from the fundamental value of a company. Tesla is a perfect example of that. The Tesla Share Price reflects expected future growth over a number of years; it has no relation to the fundamental value of the company at this moment. Thatā€™s why Tesla has the largest Market Capitalisation of any car maker, despite producing far fewer cars.

@nickspacemonkey, you havenā€™t answered this?

I think we may see another tesla split next year at this rate. obviously price increases wonā€™t be as dramatic but I firmly believe with battery day etc the share price to be 600-700 come year end.

those who got there fractional share liquidated did you all got the initial investment back?
ex I put 70 and was up 115,I got my 115 back but not sure if the initial amount.

Yes, Iā€™m hoping for some price increases too. I presume by ā€œetcā€ youā€™re referring to S&P 500 inclusion. Iā€™m hoping that will have an impact too.

Iā€™m not quite sure what you mean. Are you sure you were ā€œup 115ā€ and that you werenā€™t just up 45 from your original investment of 70?

yes exactly that. alot of people maybe couldnā€™t afford tesla at the price it was pre split and didnā€™t buy when it was similar to post split price back in March. not saying it will happen but if tesla can go up that much in 5 months ish what stops it happening again with battery day and the s&p inclusion.

I got my 0.0x liquidated to cash and the rest (x.00, 0.x0)
multiplied by 5.

I think your use of ā€œ0.0xā€, ā€œ0.x0ā€ and ā€œx.00ā€ is confusing. It also suggests that you might not have understood the process.

How many shares did you have before the split? You can leave out the ā€œx.00ā€ bit if youā€™d rather not say the actual total.

I missed this example. Notice how you are pricing the slices, not the whole cake. Thatā€™s my point. You set the price of the slices based on your potential market and that determines the price of the whole cake.

Now admittedly with a cake you could change the price of the whole cake and then reverse engineer the price per slice, but itā€™s the slice price thatā€™s important because thatā€™s what youā€™re selling. With a company, you canā€™t change the price for the whole company (the market capitalisation). It is determined by the prices in the order book.

Also, with a cake, the shop determines the price. A company doesnā€™t have any control over its share price; the market determines the price. I guess the analogy would be better if people had to bid to buy slices of cake!

Wrong, the market determines the price of cake. Itā€™s called the price equilibrium. Basic economics.

If Elon tweets: ā€œThinking of taking the company private at $420, funding securedā€ What do you think that will do to the share price? How did he arrive at $420?