Shares of Apple Inc and Tesla Inc jumped up as stock splits took effect on Monday. Apple shares rose over 4 percent and Tesla experienced a spike of up to 12 percent, attracting more investors.
Apple split its stock 4-for-1 and Tesla split its stock 5-for-1. Apple stated that this stock split was approved by the board on July 30. Tesla’s shares rose 80% since it announced its 5-for-1 stock split on August 11. Both companies stated that they aimed to make their shares more affordable to individual investors.
Lee Cooperman says these run-ups are a troublesome sign for the market
The Monday gains were one of the strongest performances since the companies announced the stock splits. However, billionaire Leon Cooperman said that these run-ups in the backdrop of stock-split announcements are a troublesome sign for the market.
Apple traded 223.4 million shares, which is around 25% more than the stock’s 30-day volume average of 178.58 million. Tesla traded 115.6 million shares, well above its 30-day volume average of 73.569 million.
Apple and Tesla become the two most traded stocks at Fidelity’s brokerage
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Robinhood and other brokerages let customers buy fractions of individual shares so that the benefit of the stock split could be less obvious than in the past. This year only three S&P 500 members announced splits, down from 12, in 2011. This is as per S&P Dow Jones Indices.
Apple and Tesla have a huge following among individual customers. Recently, Apple and Tesla were the two most traded stocks at Fidelity’s brokerage.
The success of these stock-splits could motivate CEOs of other companies with high-priced stocks to consider their own splits.
Tesla’s stock surges almost 500 percent this year
Apple’s had a previous stock split of 7-for-1 in 2014, with this month’s split being the fifth since it went public in 1980. Apple’s market capitalization has spiked to about $2 trillion, overtaking Saudi Aramco as the world’s most valuable publicly listed company.
Tesla’s stock traded at over $2000 on Friday, which is the highest price tag on Wall Street. Tesla’s stock experienced a spike of almost 500 percent this year, while shares of General Motors Co. and Ford Motors Co. fell due to the effect of the coronavirus pandemic.