Hey everybody Rob Maower here and today we were talking about some breaking news on

Tesla's stock. Tesla's investor relations team in the after hour session today

announced that Tesla will be doing a five for one split on Tesla stock.

In the after hour session right now as I'm recording,

Tesla is trading up about 6% on the news after finishing the day, down 3%.

The statement in full from Tesla reads, quote, Tesla Inc. announced today that the Board of Directors

has approved and declared a 5-1 split of Tesla's common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors.

Each stockholder of record on August 21st, 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 28th, 2020.

Trading will begin on a stock split adjusted basis on August 31st, 2020."

So if you're not familiar with the stock split, pretty simple concept, basically for every

share of Tesla that someone owns, they will be granted four additional shares,

meaning they would then own five at the same

time the stock price will then be reduced to one-fifth of the price that it is trading at at that time

meaning there is no change to the valuation or the market cap of the company so Tesla, this will happen after the close of trading on Friday, August 28th,

and then on Monday, the trading will start at the new lower price

with the additional share count factored in.

So if Tesla is trading at $1,500 per share at the end of the day on that Friday,

you have one share. On Monday, you'll have five shares each at $300 a piece.

I'm sure people have similar questions about option contracts as well.

Because this is a five for one split and not something a little bit weird like a three for two or something like that,

all options contracts will be adjusted in pretty much the exact same way.

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