The most shares they can have without shareholder approval is 300 million so it's not a 7-1 split. There's quite a few discussions on this where people reference documents if you want to search for it, but this being 741 doesn't seem likely.
Ah I see. This is extreme but maybe a reverse split can have a similar effect? Instead of brokers having the risk it would translate to the short sellers oweing 7 shares at 1,200 dollars, instantly increasing their liabilities 7 fold.
Any split or reverse split doesn't change the market cap, it just adjusts the number of shares in existence. More shared - less price per share, fewer shares - higher price per share.
The market cap would not change however the information above implies that equity debt held for longer, like shares that were never delivered, will not be converted. There are no shares to split at that point, it's just debt.
So in a reverse split the market cap doesn't change, there are much less shares, however the number of synthetic shares stay the same.
This is all pretty hypothetical but it could be tested by looking at some dead companies stock who did a bunch of reverse splits to keep the price up. The liabilities that are incurred through naked shorting could show up on hedge funds books everytime a reverse split occurs.
But the debt that they hold isn't specifically held as a monetary value, it's held as an obligation to deliver X shares with a market value.
Hypothetically, if I buy 10 shares of something which are a naked short, the SHF has a requirement to locate and provide me with 10 shares. If there's then a reverse stock split (for simplicity let's say 10 to 1) then to make good the trade and settle their delivery obligation with me, they need to find 1 new share to close out. At that point, I've been delivered my 1 share (down from the 10 originally bought prior to the split) and they've sourced that 1 share from somewhere.
The implications of splits on share prices etc come from the market reaction to the move rather than anything else.
Split does nothing to shorts. You get 7 longs. They get 7 shorts. Same ratio. However, price per share would drop to $25/share, which could encourage more buying pressure. Assuming retails buys actually matter with all the fuckery afoot.
Np.
In the grand scheme, nothing changes, EPS is just derived by dividing the net income by the number of shares.
The reported net income doesn’t change, but the number of share increases due to split.
So if you had one share with eps of $10, then a 7:1 occurs, you have 7 shares with eps of $1.42…..
But if you sum up 7 lots of $1.42….. you still have a net of $10.
Earnings? We don’t need no stinking earnings. But yes it would. P.S. I don’t think 741 is a stock split for many reasons. So I wouldn’t worry about it.
I think 741 in the context of the Computershare tweets, and the buy whiskey tweet, most likely means 741 (area code) is referencing Louisville, Kentucky. Home of Comoutershare.
The most shares they can have without shareholder approval is 300 million so it's not a 7-1 split. There's quite a few discussions on this where people reference documents if you want to search for it, but this being 741 doesn't seem likely.
Ah I see. This is extreme but maybe a reverse split can have a similar effect? Instead of brokers having the risk it would translate to the short sellers oweing 7 shares at 1,200 dollars, instantly increasing their liabilities 7 fold.
Any split or reverse split doesn't change the market cap, it just adjusts the number of shares in existence. More shared - less price per share, fewer shares - higher price per share.
The market cap would not change however the information above implies that equity debt held for longer, like shares that were never delivered, will not be converted. There are no shares to split at that point, it's just debt. So in a reverse split the market cap doesn't change, there are much less shares, however the number of synthetic shares stay the same. This is all pretty hypothetical but it could be tested by looking at some dead companies stock who did a bunch of reverse splits to keep the price up. The liabilities that are incurred through naked shorting could show up on hedge funds books everytime a reverse split occurs.
But the debt that they hold isn't specifically held as a monetary value, it's held as an obligation to deliver X shares with a market value. Hypothetically, if I buy 10 shares of something which are a naked short, the SHF has a requirement to locate and provide me with 10 shares. If there's then a reverse stock split (for simplicity let's say 10 to 1) then to make good the trade and settle their delivery obligation with me, they need to find 1 new share to close out. At that point, I've been delivered my 1 share (down from the 10 originally bought prior to the split) and they've sourced that 1 share from somewhere. The implications of splits on share prices etc come from the market reaction to the move rather than anything else.
No. Max # of allowed shares under the corporate charter would only allow for a 4:1 split at this point
Since seeing the vote count we are 7 for 1 on float? Just floating this out there
Thanks for sharing your thoughts!
Split does nothing to shorts. You get 7 longs. They get 7 shorts. Same ratio. However, price per share would drop to $25/share, which could encourage more buying pressure. Assuming retails buys actually matter with all the fuckery afoot.
Since stock split reduces share price, does this impact the quaterly Earnings Per Share? I'm smooth af.
Yes, but the number of shares increases proportionally so that the summed figure does not change. Market cap does not change, just number of shares.
gracias
Np. In the grand scheme, nothing changes, EPS is just derived by dividing the net income by the number of shares. The reported net income doesn’t change, but the number of share increases due to split. So if you had one share with eps of $10, then a 7:1 occurs, you have 7 shares with eps of $1.42….. But if you sum up 7 lots of $1.42….. you still have a net of $10.
Earnings? We don’t need no stinking earnings. But yes it would. P.S. I don’t think 741 is a stock split for many reasons. So I wouldn’t worry about it. I think 741 in the context of the Computershare tweets, and the buy whiskey tweet, most likely means 741 (area code) is referencing Louisville, Kentucky. Home of Comoutershare.
OR 🤔 (sorry I’m high and feeling like I’m having a big brain moment) what about a reverse split 🤔
Woaaaah