my CFD opened just got closed. same for the Invest tesla share. is this temporary ?
Itās concerning that you donāt even know what weāve been discussing.
That is all weāve been discussing.
Dude, they are the same thing. That is what you said you totally disagree with. Iām 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.
Itās interesting that absolutely nobody has agreed with either of us yet.
Can anybody settle the argument?
To be clear, all Iām 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 ānewbieā get a āleader badgeā if Iām 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 itās intrinsic value and the number of shares gets a determined price. So itās 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 doesnāt have anything to read , splitting share doesnāt 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 doesnāt 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 doesnāt 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 doesnāt affect the value . It is the consequence after splitting , either increase or decrease, its always supply and demand in market.
@chen, I challenge you to quote one thing that @nickspacemonkey or I have written today that suggests that either of us donāt 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?
āmaket cap / number of shares = share priceā is the same as āshare 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 itās 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.
Iāve already agreed several times that you can calculate the Share Price using this formula. However, you canāt change the Market Capitalisation directly, so you canāt change the Share Price. Admittedly, I didnāt express this very well in my original post, but I think Iāve 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 isnāt 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. Thatās why Tesla has the largest Market Capitalisation of any car maker, despite producing far fewer cars.
I think we may see another tesla split next year at this rate. obviously price increases wonāt 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, Iām hoping for some price increases too. I presume by āetcā youāre referring to S&P 500 inclusion. Iām hoping that will have an impact too.
Iām not quite sure what you mean. Are you sure you were āup 115ā and that you werenāt just up 45 from your original investment of 70?
yes exactly that. alot of people maybe couldnāt afford tesla at the price it was pre split and didnāt 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 ā0.0xā, ā0.x0ā and āx.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 āx.00ā bit if youād rather not say the actual total.
I missed this example. Notice how you are pricing the slices, not the whole cake. Thatās 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 itās the slice price thatās important because thatās what youāre selling. With a company, you canāt 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 doesnāt 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. Itās called the price equilibrium. Basic economics.
If Elon tweets: āThinking 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?