Tesla stock split

[nickspacemonkey]

This is answered above. You don’t have to do anything.

Tesla stock split

You’re absolutely on point with yours, @CavanHaganInvesting! This example isn’t quite as accurate, @daindian, as 0,2 * 5 is a whole number and if you have 1 share outside your pie and 0,2 inside = 1,2 total shares before the split. Let’s say the split is 5 to 1 = 1,2 * 5 = 6 and there will be no remaining quantity. All new shares after this split are allocated in the following way. Shares inside the pie (Total shares after the split * Split coefficient/Total quantity before split) = 0,2 * 5 /…

[CavanHaganInvesting]

Well actually if they want to buy their fractional shares back they’ll have to rebuy them, that won’t be done automatically

[Hectares]

I’m now confused by this Tesla split as i thought ALL fractional shares were not included, not partially included.

Does T212 reply now mean…

If i have 1.5 Tesla shares in CFD (1 whole share and half a share):

Due to the split, i will receive 7 shares? (5 shares due to the 1 whole share, 2 shares due to the .5/half share, and .1 refunded?).

so sorry to ask you, i’ve read several replies for the past week+ and the ones today just threw me as it implies fractional shares are included… or i’m reading it wrong.

i was going to sell the .5/half share so i had control of my selling price, however if i can get 2 additional shares, i could either sell .1, or let T212 do so.

Thank you in advance

[Supraman]

There seems to be conflicting information from @David and @L.D. about the handling of fractional shares:

@David

Unfortunately, fractions don’t get split (reverse-split), yet.

0.2 won’t become 0.8, neither will 0.3 → 1.2. They’ll just become cash which you can use to purchase the post-split shares.

@L.D

This example isn’t quite as accurate, @daindian, as 0,2 * 5 is a whole number and if you have 1 share outside your pie and 0,2 inside = 1,2 total shares before the split.

Let’s say the split is 5 to 1 = 1,2 * 5 = 6 and there will be no remaining quantity. All new shares after this split are allocated in the following way.

Has the implementation changed since @David posted on the Apple thread?

Can somebody from @Team212 please confirm whether my examples below are right or wrong?

ISA & INVEST (No Pies) Examples
1 share becomes 5 shares
0.2 of a share becomes 1 share
0.3 of a share should technically become 1.5 shares, but the fractional part is not supported so it becomes 1 share plus the cash equivalent of 0.5 of a share at the post-split price (which is equal to 0.1 of a share at the pre-split price)
0.31 of a share should technically become 1.55 shares, but the fractional part is not supported so it becomes 1 share plus the cash equivalent of 0.55 of a share at the post-split price (which is equal to 0.11 of a share at the pre-split price)
etc.

CFD
My understanding is that you’re not actually purchasing shares in a CFD. Does this allow Trading 212 to include the fractional part after the split has happened, or is it treated exactly the same as ISA & INVEST?

[Joey_Fantana]

Aren’t they both saying the same thing except David has omitted the detail that the fractionals will be considered for encashment AFTER the split?

Your ISA and INVEST examples look as I understand it.

[Supraman]

I’ve never used pies so I’m probably out of my depth here.

Are pies available in ISA & INVEST, but not in CFD?

My interpretation of the information provided so far is that Trading 212 will sum the total non-pie shares (including fractions) with the total pie shares (including fractions), multiply the sum by 5, add the cash value of any remaining fractional part to free funds and then allocate the remaining whole shares to the non-pie and pie sections in their original proportions, which may result in fractional shares both inside and outside the pie. Is that right?

If so, can somebody from @Team212 please confirm whether my examples below are right or wrong?

1 non-pie share and 2 pie shares become 5 non-pie shares and 10 non pie shares
0.2 non-pie shares and 0.4 pie shares become 1 non-pie share and 2 pie shares
0.3 non-pie shares and 0.6 pie shares become 1.33 non-pie shares, 2.66 pie shares and the cash value of 0.5 shares at the post-split price.

In the last example, there is a total of 0.9 shares, which become 4.5 shares after the split. The cash value of 0.5 shares (the unsupported fractional part) at the post-split price (or 0.1 shares at the pre-split price) will be added to free funds. The ratio of non-pie to pie investments was originally 1:2, so the remaining 4 shares are allocated as 1.3333… non-pie shares and 2.6666… pie shares. I’m not sure exactly how the rounding will be handled.

[Supraman]

@Joey_Fantana

Aren’t they both saying the same thing except David has omitted the detail that the fractionals will be considered for encashment AFTER the split?

You might be right. However, I’ve seen a lot of posts that share my interpretation and nobody has corrected any of them.

However, you now have me wondering if @David’s comments only relate to people who own less than 1 share.

There seems to be a lot of confusion and my posts are an attempt to get a definitive answer.

[Supraman]

@L.D

If you own 1 full share in total before the split - inside and outside a pie, your total quantity of shares after the split will be fractional

If you have 1 full share before the split then you will have 5 full shares after the split. How is that “fractional”?

@L.D

For example, if you have 1 full share before the split, and you have 0.5 shares after the split

Why would you have 0.5 shares after the split?

[laguiar]

@Joey_Fantana

the detail that the fractionals will be considered for encashment AFTER the split

I think this detail is the most important piece on this puzzle

[Supraman]

@L.D

Shares inside the pie (Total shares after the split * Split coefficient/Total quantity before split ) = 0,2 * 5 /1,2 = 0,83 shares inside your pie after the stock split.

Is this example definitely right?

If you have 0.2 shares inside a pie and 1 share outside a pie, surely you end up with 1 share inside the pie and 5 shares outside the pie?

I don’t understand the formula (in words) or the figures you’ve substituted for the various terms.

I would’ve expected:

Total Shares in Pie Before Split / Total Shares Before Split (Inside & Outside Pie) * Total (Whole) Shares After Split (Inside & Outside Pie) = Total Shares in Pie After Split, i.e. 0.2 / 1.2 * 6 = 1

Therefore, if you’re dealing with whole shares, isn’t it as simple as multiplying by 5?

[Supraman]

@laguiar

I think this detail is the most important piece on this puzzle

Yes, but David’s exact words were “fractions don’t get split”. He didn’t say “fractions get split, but then any remaining fractions will be encashed rather than being converted to shares”.

Of course, it all depends what he means by “fractions”. I believe that most people, @Richard.W included, think he means the fractional part of the number of pre-split shares, e.g. the 0.1 in 0.1 or the 0.1 in 1.1 or the 0.1 in 10.1.

It’s also possible that by “fractions” he just means any total holding of less than 1 share.

However you interpret @David’s comments, @L.D’s comments contradict them in my opinion. He is talking about encashment of the fractional part of the number of post-split shares.

We need clarification on this.

[Supraman]

@Richard.W

@Martin

If you buy TSLA shares after the record dates but before Aug. 31

I have read the same for AAPL. But I do not understand why the record date is important. It seems that one receives split shares so long as a purchase is made before Aug 28. It does not matter if the purchase is before or after the record date of 21 August. Similarly, with selling.

I actually found this thread today in the hope of uncovering an answer to the significance of the “record date” of 21/08/2020 (yesterday); I got distracted by the dubiety of how fractional shares will be treated!

I’ve tried various Google searches and I can’t find a single answer. Can somebody please explain it?

Did the “pre-split price” get fixed at the record date? If so, that might provide an answer. Is it a timing thing? If you buy after the “record date” could it take longer for the extra shares to be added to your account, maybe even a few days?

[Joey_Fantana]

Yes. Had I known this sooner I may not have sold half a share yesterday. Oh well, if I want it that bad I’ll buy again after the split.

[Clark]

@Supraman

Is this example definitely right?

Glad that’s it not just me totally confused.

[Richard.W]

"https://markets.businessinsider.com/news/stocks/tesla-apple-stock-price-surge-prepare-split-record-before-week-2020-8-1029524896

Record date is of no importance

"The stockholder record date is when the company determines which shareholders are entitled to receive additional shares due to the split. It is simply a corporate bookkeeping task.

Investors who buy shares of Tesla after today’s stockholder record date, but before the effective date, will still receive five shares for every one share they bought once the split is enacted on August 31. Ditto for Apple"

“Here’s where the corporate accounting concept of a record date comes in. Let’s say that someone buys a share of Apple on August 26, 2020 – after the record date but prior to the effective date. In this case, the new shares will technically be given to that share’s prior owner. However, because they sold their share prior to the split’s effective date, those new shares will be transferred (by the brokerage) to the investor who bought the shares.”

[Joey_Fantana]

Thanks Richard, yeah I thought as much after chatting with some friends about it. I’m alright with it tbh. The 0.5 sell was in Invest. Meanwhile I bought 3 additional shares in my ISA so happy with my coverage come next week. The half share made me a nice profit to put into some new instruments I’ve had my eye on.

[ADY1]

If I purchased a share of Tesla on the 24th would I still be eligible for the stock split on T212?

[Supraman]

@Richard.W

In this case, the new shares will technically be given to that share’s prior owner. However, because they sold their share prior to the split’s effective date, those new shares will be transferred (by the brokerage) to the investor who bought the shares.

Thanks for finding this explanation @Richard.W. No wonder we were confused by the record date!

It seems like it’s only relevant to brokerages and not actual investors. I wonder if it’s relevant to Trading 212, or if they’ll just wait until the market closes this Friday 28/08/2020 (the effective date) and just handle everybody the same way. It’d be interesting to know.

I assume that the considerable Tesla share price increase last Friday 21/08/2020 (the record date) was because the majority of investors thought the date was significant to them. After all, it’s mentioned prominently in the official Tesla statement and in every article about the split, often with specific examples about what happens with shares bought or sold between the record date and the effective date, even though those examples just describe the same process as when shares are bought before the record date.

I wonder if the share price will flatline until the effective date now. Or do enough people understand (or will subsequently realise) that it’s the important date and therefore the price will continue to rise all week?

I notice that the official Apple statement says “If you buy shares on or after the Record Date but before the Ex Date, you will purchase the shares at the pre-split price and will receive (or your brokerage account will be credited with) the shares purchased” but the Tesla statement says “Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020”. Apple explicitly says “on or after the Record Date”. If it’s the same for Tesla then everybody who bought shares on Friday 21/08/2020 were technically a day late, and may therefore be treated differently internally by some or all brokers, although with the same final result!

Finally, I’m interested to hear whether you’ve changed your mind on what will happen to accounts that contain a non-whole number of pre-split Tesla (or Apple) shares in light of the recent posts in this topic.

I think if we can get a definitive answer to what happens to 0.1, 0.2, 0.3, 1.1, 1.2 and 1.3 Tesla shares in ISA, INVEST & CFD, and whether pies can effectively be ignored for the purposes of the calculation, then we’ll understand it fully. I tried to edit a previous post to include the missing examples but I wasn’t able to.

[Supraman]

@ADY1

If I purchased a share of Tesla on the 24th would I still be eligible for the stock split on T212?

All the evidence suggests that you will receive the extra shares.

There is still a slight doubt in my mind as to whether there will be a delay of some kind before you receive them.

[pintas]

What evidence are you referring to?