If you thought tesla’s stock split into 5 was just as simple as that, then it seems you also fell for the trick. Watch today’s video to find out what jessie opportunity cost investing and lukas discussed together.
Many thanks to jessie rancourt from jessie opportunity cost investing. Be sure to check his channel out as well, if you haven’t done so.
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Stock splits aren’t as simple as just a simple split from 1 share into 5 and that’s the end of it, there is much more to it, than you think.
It’s a different story than splitting your body in two.. In which we can exercise with move with jenn, through here channel here:
Https://www.Youtube.Com/channel/ucezl…
If you want a clear explanation on stock splits, be sure to check out nolan dalman’s channel:
Https://www.Youtube.Com/channel/uc97f…
What about the opportunity costs that you might create or miss when taking this opportunity.
Splitting a share doesn’t mean the share of tesla or apple will just be divided into 5, but each share will also lose a little bit of value because of the overhead costs a company has to make when splitting a share.
In a research professor gunaratna looked into the effect of companies splitting their shares. The research shows if they prepare the whole process well, and think of a way to keep or grow the value of the shares. Then it will be more beneficial than when a company just merges and splits their shares afterwards.
In cases of fractional shares, that becomes even more complicated. When you do not own full shares, the brokerage account you invest through, will make their choices for your fractional shares you own. Either they cash out your shares, which means the tax authorities will come into play as you have cashed out your stocks. Or you’ll be charged through your brokerage account for getting a transaction of splitting your shares up even more.
In the end, your stake in the company will always change in a way… For the better or the worse…
