 Hey, hi everybody. How you doing? Good to see you. I hope you're doing well Russell Moore coming to you live Hey, been a minute. Ah Dedicated to financial literacy Big news this week, I just want to talk about Tesla's split option Split option Three-to-one split I Want to talk about it Several people have been asking me. Hey, you're gonna do anything on the Tesla stock split. I was like, ah, I Don't know but yeah, I've got enough requests now. I said, okay. I'll go ahead and put my two cents in so to speak This video won't be long. I do want to make it this disclaimer real quick. I'm not telling you what to do I'm not giving you any advice financially Just just letting you know just giving you some information and then you make this decision Remember, what do I always say? If you don't learn you don't earn, baby You don't earn so make sure that you're learning as you earn. Okay. All right the more you learn the more you will earn Here we go Tesla number one The number one thing I think you have to to remember. Well, first of all, let's let's talk about the dates Real quickly on the 24th, which is Wednesday. That's when the stop splits gonna happen three to one Okay, right now the close of the market on Friday. It was around 865. It's probably gonna fluctuate a little bit before Wednesday, I'm expecting it to be the stock price should be somewhere between 270 and 310 When the split happened so on Thursday to 25th Expected to be somewhere between 270 and $300 a share When that happens You have it out. You have a decision to make now. What do I usually say when there's a stock split usually that stock will rise And let me tell you why usually before Before the actual split the institutional investors will jump in and grab theirs. They're they're they're going in they're going in Okay, because they it's gonna be lower and they're gonna have more shares The ones that usually cause it to rise on the day of the split is usually retail investors like you and I retail investors and Day traders swing traders those that are trying to make a quick profit. So they'll grab up Grab it up and as it goes up And then what will happen is you get some that'll sell off And so I usually wait for the sell-off. I'm not telling you what to do I usually wait for the sell-off and try to get it at a cheaper price Am I 100% sure it's gonna happen that it's gonna go up and not keep going? No, nobody knows Okay, nobody knows that but here's what I will say Tesla one of the reasons why they're having a stock split is for their employees They wanted to make it a more affordable for their employees Which I thought that was a good thing and then for you and I the investor the retail investor Um, I did really well on the five-to-one split. I had some shares of Tesla It's one of the reasons I'm in the house. I'm in right now. So the Tesla stock we did We did really well my wife and I so What I would say is Be careful because we're in a bear market We're in a bear market right now. It means the market is correcting. Did you look at Friday? What happened? Look at what happened on Friday? I Mean it was totally in the red Totally in the red the S&P 500 the Nasdaq The Dow Jones everything the Russell 2000. I mean everything the market just And so because of that we're in a different We're in different environment than we were when they had when Tesla had to five-to-one stock split so be aware of that we're in a we're in a bear market and So usually what will happen is that but it'll go up and it will come back down and then you can buy it at a discount One of the strategies that I'm hearing and probably one that I've adopted is You if you if you haven't already have Tesla shares and you want to purchase more than that's that's great Expecting it to go up in the long run in the long long term, but What you could do is any if you know about derivatives or options option contract you can do what's called a put option Okay, you can do what's called a put option a put option is when you're expecting it to go down You're expecting them. You're expecting that stock to go down You can use a put option as a hedge as you buy stocks Regular stocks from the split price for the long term for it going up But you're expecting hey at one point Tesla and here's the thing that this is what I'm going to end this video with in a few minutes Expect now here's the thing Over the long term Tesla is doing well They've got an issue in China right now, but Other than that with their supply chain some of the products their parts and stuff Particularly in one of the regions of China. So they're getting the government involved and it's I'm not gonna maybe that's a whole separate video Because China is a very important market for them. It's very important. I believe it's like 25% of their of their They're They're operating margins come from China Okay, so they get a lot of revenue from China. It's a lot of work done in China So that's gonna be very important. I'm keeping my eye on that, but overall it's not gonna affect It's not gonna affect them. They're gonna they're gonna keep steaming right old steaming right ahead and A couple of things that I want to highlight a few things I want to highlight with them Because one of the reasons like I said was because of their employees But mostly a time most of the time a company is going to do a stock split when they're thriving and they're doing well So it's a sign of them doing well Okay, because some people like well, what do what is Tesla? What's the future of Tesla? I do believe we're in a recession. I know people said we're heading over to recession I believe we're already in a recession. Okay. I said this six eight months ago Okay, we were headed towards this and I feel like we're in one now Because of that people are going to be pulling back on buying purchasing cars particular higher-end cars They're not high-end as far as luxury, but the price of a Everybody can't buy a Tesla your everyday person is not gonna be looking to buy a Tesla It's been sixty seventy thousand dollars for a vehicle even though it is electrical so I'm not sure how much they're gonna be affected by this. We'll see but they are steaming right ahead I mean, so let me give you an example in 2017 Tesla, okay Tesla were like they spent about three two or three billion dollars Above what they made so they were in for a loss in 2017 in 2018. They broke even pretty much they broke about about broke even 2019 one billion dollars One billion dollars in cash Cash flow. This is their profit after everything all their expenses all their taxes one billion Okay, 2019 2020 three billion right now the last four quarters. They have seven billion dollars In cash flow every quarter the last four quarters People are buying this car look around people are buying Teslas Okay, they're not not to mention their Their energy the part of their business is energy another part of their business robotics So all three of these are gonna be Here's another thing about them right now They're operating margins. They're number one out of all the automobile companies number one in operating margins is 15% number two is Who's number two BMW at around 12% Then there's Daimler and then there's Ford at fourth and GM at fifth at around eight or nine percent They're killing everybody As far as their operating margins and here's what they're doing. They keep innovating in the air of manufacturing They keep making it better. They keep making it better. They keep making it better What why is that important the more efficient and more they innovate in manufacturing on how they build those cars The more they're reducing their prices Their expenses I should say not the price of the car their expenses for example their energy They've reduced their energy. I think almost set between 17 and 20 percent per car The energy usage What does that do reduce how much they're spending it's reduces their expenses Yet they're still charging us for this amount for the car, right that increases their profit margin you guys Tesla's not going anywhere It's a good investment and now that it's gonna be cheaper And around between two to eight to seventy and three hundred dollars per share I'm not telling you what to do again. I'm not telling you there's my disclaimer But I am saying that I think it's a good call when you purchase is it's going to be vital though Do you want to go in early? Hmm the way because we're in a bear market This is personally what I'm gonna do. I'm gonna wait and give it a see see how see how far it will drop Because I know it's gonna go up and then it's gonna go up when that split happens on Thursday Maybe a couple of days it'll go up Hopefully at one point I'm guessing that it's gonna drop we'll get some of those retailers that are sell-off So there'll be a big sell-off. It'll drop and then You go in go in like Flynn Purchase some Hedge it maybe get a couple of put up get some put options to go against it So if it you know if it goes up and then it comes down you catch a profit on the way down And so that's a smart way to do it. Okay, and so I Just want to pray for everybody. Thank you Lord. I just thank you and bless them Bless everybody on their decisions financially particularly. We're heading into a recession and Jesus name. Amen. I love you Have a great great day