On 31 August Apple stocks will split 4 to 1 and Tesla 5 to 1. Want to know why?

Two of the most popular US individual stocks have both announced splits this month.

One Apple share will be split into 4
One Tesla share will be split into 5

On news of the announcement, Tesla price pumped by 30% while Apple went up 24%

Why do they split the stocks?
There is much speculation as to why this is done. Some speculate that by keeping the share value lower, it democratises investing, and allows those with smaller portfolio sizes to access hugely successful stock types. Others suggest that the mere announcement of a split is enough to attract more interest from investors. Either way, this will be apple’s 5th split since it went public.

How does it affect you?
Any client with an open position in either stock at the close on Friday August 28th will see their position adjusted for the open on August 31st. The notional value of their investment is unchanged but they will have 4 (in the case of apple) times as many shares, at 25% of Friday’s closing price.

If you don’t have any open positions, you may wish to investigate how you can incorporate this stock split as part of your trading strategy.

CTA: Trade AAPL
CTA: Trade TSLA

TIO Staff
Author

Write A Comment

X

Get our latest market analysis by email, daily