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Tesla Announces Split Incoming (March 28 2022)

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One of the things I learned about stock splits and their disproportionate short term impact on the stock price is splits impact short sellers quite a bit.

Essentially if you are shorting a stock, you are “Borrowing” someone else’s shares and sell it to someone else. So if you are short, you have to pay the dividend which the shareholder who you borrowed the share from would otherwise receive. In this case, the dividend is some (unknown at this point) number of shares of the stock.

This means almost all shorts will have to buy shares to cover their position prior to the date of the split. For a company that has a large number of shares shorted, that can have a huge impact on share price. It also means short activity on the stock will be quite limited until the split happens.
 
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I was going to stipulate ”as a percentage”. But then I realized that if it splits, 5:1, an $80 increase would multiplied by 5 times as many shares. So it really doesn’t matter.
 

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Tangent: AMC @ 29.2 Ford @ 16.7

Dont know how skeptical I should be with AMC rise today.
 

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I was going to stipulate ”as a percentage”. But then I realized that if it splits, 5:1, an $80 increase would multiplied by 5 times as many shares. So it really doesn’t matter.
Just stipulate before CT production start date.
 
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Just stipulate before CT production start date.
That’s barely a gamble at all. There are likely less than 300 trading days before the Cybertruck launch. (252 trading days per year) That puts us into May 2023.
 

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That’s barely a risk at all. There are unlikely to be 300 trading days before the Cybertruck launch.
When you carry 100% of the risk, the system should be gamed in your favor.
 
 
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