This video is brought to you by ftx. If you want to get free crypto every time you trade make sure to go to medkevin.com, ftx and use code meet kev when you check out well folks tesla. Does it again take a look at this tesla this morning? At 3, am we saw this form go through at 3 a.m. Tesla had this filing release with the sec asking for permission that, on march 28, tesla announced the plans to request stockholder approval at the upcoming 2022 annual meeting of stockholders for an increase of the number of authorized shares of common stock.

Through an amendment of the blah blah blah in order to enable a stock split in the form of a stock dividend, holy smokes and obviously the stock today is going kooky like absolutely kooky uh. It is presently up a 7.73. So what the heck is? A stock split in the form of a stock dividend like we've heard of stock splits before right. A stock split is when we have a pie of, let's say a thousand shares and what we're gon na say is we're gon na do a two for one split, let's say, and then we do a two for one split and instead of that pie being sliced Into a thousand slices, it's now sliced into two thousand slices, so the pie or the market caps tesla is still the same.

Approximately a trillion dollars a little bit more today, so the value of the pie or the pizzas may be still 20 bucks right. That value is the same, but now you just have smaller slices, because maybe you're you're feeding little children and they want smaller slices or people who want to be able to afford cheaper stock prices uh. So that way they could play options on tesla, which is very difficult to do when tesla stock itself is so expensive. Now, of course, we could do fractional shares, which means stock splits, don't matter so much that anymore, but for options, they matter a lot and there are a lot of people frustrated with a high price of tesla.

Because then, you can't sell calls to hedge your position, or you can't sell, puts to help a yield farm and potentially increase your position right, but this is not so much an options lecture. This is more just crazy that right now a tesla's up, eight percent, but also not surprising, because the last time tesla had this kind of stock split. We had a pretty nice rally as well. So, let's go back to the last time that tesla announced a stock split.

First, it's worth noting that tesla had a run from about july of 2020, where the share prices were around 200 and the tesla stock ran all the way to about 287 dollars, and on this evening here on august 11th, tesla announced their 5 for 1 stock split Back in 2020., this led the stock to go from a closing price of 277, all the way to a closing price of 487 with a high of 525, which was crazy. But if we go 487 divided by 277, that's an increase of 76 in the stock price solely after the announcement of a stock split. Now, at the height of the stock split that 487, we did have a little bit of a fall. We went from 487 all the way down to 320 320 487, which is a give back of roughly 34, which is pretty wild.

Now uh, you know to go up 75 percent and then to lose. 35 percent is one heck of a roller coaster, and those losses came right amongst that tech crush of september of 2020, which was in part in my opinion, started by tesla's stock split happening. Tesla then issuing a 5 million raise at a high share price and then apple stock split also occurring on august 31st, and so within a few days. You saw this kind of plummet, so you could see a lot of volatility around this and and then tesla traded.

Quite sideways for a period of two and a half months before having its next rally - and this is very common - you could even see volume collapse right down here after the split and that's because you get a lot of traders that come in and then they go Out as soon as the stock split occurs not uncommon at all, but i do expect that we're going to see a lot of people today getting into tesla stock, with the anticipation of riding this stock to potentially all-time new highs. With this now announced stock dividend. Now we don't yet have a date for when the next annual meeting is or when this split will occur and the difference between a stock split and a stock dividend. I've already explained a stock uh split via that pie analogy.

But when you look at a stock dividend, just think of it this way, it's it's almost the same thing. Okay, let's say you have 1.1 billion shares outstanding for tesla, which you do and elon musk says all right. Everybody who owns a share of tesla is going to get another share of tesla right. Well, then, all you're really going to do is you're going to double the amount of shares outstanding here and then what you'll see is my price right here.

That is my reasonable price by the end of 2025, which i'm going to rework this that's been a few months since i've reworked this, but this is very conservative, in my opinion, 2000 bucks. But anyway, if i now double this roughly, this should roughly have so. It should go right under about a thousand there. You go, it does not a surprise.

So, in other words, you have another share, but you're still diluting you're, basically still slicing that pie into smaller slices. It's just not going to be as exactly clear how many because they might say: okay, everybody who owns a share of tesla gets 1 20th of another share. Okay got it! It's just another way of saying: okay, we're going to dilute the share price by 20 and we're going to issue 20 new shares. So if you have 1 000 shares now you have 1200 shares.

You still have the same market value for the company, that's being sliced up into smaller bits, so nothing changes fundamentally for the company everything's the same the price. Will you know compress when you get this dilution on this dilution date, but that doesn't mean it won't run. Like crazy before that, so for me this does change things a little bit. It's actually going to mean that for tesla, when i previously said, if we retrace back to the higher third i'll, be likely to sell calls which take a look at this, i said that if we retrace for some reason back to the here, let me go to The day chart it's a little easier to see this way.

There see the yellow lines here. It basically said if we retrace to this upper third here between uh somewhere around 66, so about the mid midway point, which is roughly where we are now to the hundred percent line that i would consider selling calls to hedge my position here, because i don't think We should be at all-time highs with all the crisis that's going on in the world this. This is now going to change uh. Some people call this flip-flopping, but that's idiotic, whatever they can be morons and broke losers, uh.

In my opinion, this is a way of suggesting wait, a minute numbers or facts, and data have changed. The last thing i want to do is hedge, my tesla position going into a stock split. Maybe right, as the stock split comes up i'll hedge. My position at that point, but tbd and we'll talk about it so anyway, thanks so much for watching this video folks we'll see in the next one.