Upcoming Stock Splits And What To Expect

First Apple and now Tesla, here’s everything you need to know about these two big upcoming stock splits.

What is a stock split?

A stock split is when a company divides the existing shares of its stock into multiple new shares.

Does a stock split change the value of my positions?

Irrespective of the split (2:1 or 1:2), the total value of positions will remain the same as the market close price the day prior to the stock split. What will change is the number of positions you own. Example 100 shares at $4/share (total value $400) become 400 shares at $1/share (total value $400).

What if I own fractional shares?

All Stake traders with fractional holdings in $AAPL or $TSLA will also receive their respective split.

Apple 4-to-1

In late July, Apple announced a 4-to-1 stock split. What this means is all those holding positions in Apple will receive 4x the number of $AAPL units you own when the split occurs. Concurrently, the price per share of $AAPL will divide by 4 (so 100 shares at $4/share become 400 shares at $1/share). Below are the expected timings:

  • Record Date – August 24, 2020 – all those holding AAPL will be entitled to receive additional shares due to stock split.
  • Split Date – August 28, 2020 – shareholders are due to split at 4-to-1 after the close of business on this date.
  • Ex Date – August 31, 2020 – date determined by Nasdaq when Apple commons shares will trade at the new split-adjusted price.

For more information read here.

Tesla 5-to-1

Early August, Tesla announced a 5-to-1 stock split. What that means is all those holding positions in Tesla will receive 5x the number of $TSLA units you own when the split occurs. Concurrently, the price per share of $TSLA will divide by 5 (So 100 shares at $4/share, total value $400 become 500 shares at $0.80/share, total value $400). Below are the expected timings:

  • Record Date – August 21, 2020 – all those holding TSLA will be entitled to receive additional shares due to stock split.
  • Split Date – August 28, 2020 – shareholders are due to split at 5-to-1 after the close of business on this date.
  • Ex Date – August 31, 2020 – date determined by Nasdaq when TSLA common shares will trade at the new split-adjusted price.

For more information read here.

What if I sell between the record date and split date?

If you choose to sell your positions you will sell at the pre-split price on that trading day, and your share split entitlement will be passed onto the new buyer.

What if I buy between the record date and split date?

Similarly, if you purchase shares between this date, you will do so at the pre-split price and will receive your share split entitlement on the Ex Date.

How will this work with my Stake account?

We are working with our broker partner to ensure that all Stake accounts will be showing the correct stock split at the time of Ex Date. However, due to the volume of accounts holding AAPL and TSLA positions, you may experience a slight delay in live price and stock number at market open.

If you have any questions feel free to contact us on support@hellostake.com