Tesla Inc. (TSLA) recently announced a five-for-one stock split. The split will take effect on August 31 for each shareholder in the record. 21. The split takes place automatically within your account, and you don’t have to perform any actions. USB is not charging any fee for this kind of split. USB us
Suppose you owned shares of TSLA before the market opening in August. Thirty-one, you’ll own five shares per one you own, and the price of TSLA shares will be reduced to one-fifth of its value at the beginning of trading in August. 31. If, for instance, you own 100 shares of TSLA, which are valued at $1500 per share, at the time of the split, you’ll have 500 shares worth $300 each.
If you also own one option call that controls 100 shares and the strike price of $1500, you’d own 5 contracts and over 500 shares with 300 strikes after the split.
If you decide to sell TSLA shares following the record date of August 21, for TSLA, but before August 31, you’ll offer them for sale at the pre-split price. The shares you sell will not have the right to split shares.
In the example above, if on the final commercial day to trade TSLA August 28th, you sold 100 TSLA shares at an un-split price of $1,500 per share; you will get $150,000. There will be no split shares.
Suppose you purchase TSLA shares before the record date but before August. 31st, you’ll buy them at the pre-split price. After the split, you’ll be able to receive additional shares from the split.
Example: If, for example, on August. 26, you purchase 100 shares (and keep them until the close the following day, August. 31) at $1,500 per share, you’ll be paying $150,000. You will get 400 more shares following the stock split, and the cost will be decreased to reflect the post-split price.