The stock split really should not affect your investment decisions. $400 = $100 x 4. Nothing has changed. With the current working of Freetrade fractional shares, it can’t make any difference, you can only buy dollar amounts.
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Lowers overall price so more investors can get in = stock will go up.
All current investors get 4x the shares and can ride the growth wave back up from ~$100 a share.
24th August -https://twitter.com/reneritchie/status/1288936556309491718
Curious how will Freetrade handle the stock split?
I’m surprised they’re doing this given the availability of fractional shares, but I’m not surprised because of the amount of interest it creates. I wonder which companies will follow suit and spilt stocks.
Stock splits are now largely completely irrelevant owing to the widespread availability of fractional shares.
The stock split by Apple (whilst Amazon is happy to have shares priced at over $3,000 each) has much more to do with Apples place in the Dow Jones 30. This index is calculated on a price weighted basis (not market capitalisation weighted like almost all other indexes) so as Apple shares grow in value they become a much larger part of the index.
I’m still new to stock splits. Does this mean FT will add these shares to my account? I hold a small number.
Yes each share will become 4 and will be worth exactly 25%. So nothing changes for you except the number of shares you hold.
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hi i’m also new to stock splits. does that mean if i buy apple now i’ll be eligible for the split or is it only current holders? Thanks
If you buy now until the 24th August close business date - the current shareholders will have the stock split then on the 31st August the stock price will drop and get adjusted.
Thoughts? Is it worth buying the stock now before the split or when it gets spilt?
Doesn’t really matter
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Surely stock prices will rise on the day of the spilt though as new investors will buy?
Small investors don’t move liquid stock prices.
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Does anyone know how the spilt will be displayed in the app? Willy position be shown as negative because the price of my shares will technically be less?
In previous stock splits its been a bit weird not updating immediately. Dont be shocked if it says -75% for a bit. Its shot up today though!
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Hi @Freetrade_Team is it possible to get a word from Freetrade on how they would handle the stock split relating to fractionals? i.e. will the fractions multiply by 4 or will Freetrade sell them meaning we will need to rebuy them, paying FX fees a second time? (Would we also pay FX fees to sell in the second scenerio)
Thanks!
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Why would Freetrade sell them?
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Its dependent on if fractionals are setup for a reverse split yet or not, if they arent, Ft will need to sell our positions, then we would need to rebuy them at the new price, presumably paying FX on the original purchase, sell off and re-purchase, plus paying the new cost which will likely rise a little on the split (at least temporarily)
If Ft fractionals are setup for a reverse split then they wont need to do this.
Some of Ft competitors have confirmed they are not setup for a fractional reverse split yet so positions under 1 full share will need to be sold, that triggered my query here. If we get early notification that its the same, those in the position to do so, could make the decision to purchase up to a full share before the split happens.
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Surely this is a forward split?
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Interesting! Thanks for explaining, I had absolutely no idea about that. Sounds complicated, hopefully we get some clarity soon. I don’t think we should be penalised if that is the case.