The high-flying shares of Apple and Tesla rose further on Monday, as investors jumped at the opportunity to own shares at more affordable prices after the companies split their stock.
Apple’s previous stock split was 7-for-1 in 2014 and its fifth since going public in 1980.
Splitting stocks is a way for companies to make it less expensive to buy individual shares although moves by some retail brokerages to offer slices or fractions of shares to smaller investors has made the impact increasingly marginal.
Shares of the Cupertino, California-based company, which have rallied nearly 30% since it announced its surprise 4-for-1 stock split and blockbuster quarterly results on 30 July, rose 2.6% to US$127.99 on Monday.
The rally helped the iPhone maker overtake Saudi Aramco as the world’s most valuable publicly listed company and become the first publicly listed US company to breach $2-trillion in market capitalisation.
Apple shares closed at $499.23 before the split on Friday, up 70% this year.
Tesla followed suit earlier this month by announcing a 5-for-1 split to portion its richly valued stock into smaller chunks, which also took effect on Monday.
Five-fold surge
Tesla’s stock has surged more than five-fold this year, while shares of General Motors and Ford declined on fallout from the Covid-19 pandemic.
Shares of Tesla, up 61% since it announced its first-ever stock split in mid-August, closed at $2 213.4 on Friday. They rose 3.2% at $456.90 in early trading on Monday.
Stock splits have become rare on Wall Street in recent years, with just three S&P 500 members announcing splits in 2020, compared to an average of 10 a year over the past decade, according to S&P Dow Jones Indices — Reported by Subrat Patnaik, (c) 2020 Reuters