On 31/08/2020, high-flying shares of Apple and Tesla rose further as investors pounced at the opportunity to own shares at more affordable prices after the companies split their stock. Apple climbed 3.39% while Tesla gained a whopping 12.57%. In the following days, some investors have sold their positions in order to lock in profit.
Some background, the stock split was aimed to make them more affordable for investors and increase trading liquidity - with Apple doing 4-for-1 and Tesla 5-for-1 stock split. This is the first time that Tesla has split its shares, but the fifth for Apple.
Historically, companies that have engaged in share splitting have done very well afterwards. Based on an analysis of 60 years worth of historical data, the average share price rose by approximately 33%, 12 months post stock split.
Although splitting shares does not affect a company’s stock market value, it does have a psychological effect on investors. What do you speculate will be the future for Apple and Tesla stocks?