The high-flying shares of Apple Inc and Tesla Inc gained more ground on Monday, ahead of their first official trading following a split into smaller portions that makes it easier for retail investors to own the shares.
It will be Apple’s latest stock split since a 7-for-1 move 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 July 30, were priced at $126.56, up 1.4% when compared to Friday’s split-adjusted close, in pre-market trade.
The rally helped the iPhone maker overtake Saudi Aramco as the world’s most valuable publicly listed company and become the first publicly listed U.S. company to breach $2 trillion in market capitalization.
Apple shares closed at $499.23 before the split on Friday, up 70% this year.
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TESLA IN HOT PURSUIT
The electric carmaker followed suit earlier this month by announcing a 5-for-1 split to portion its richly valued stock into smaller chunks, which also takes effect on Monday.
Tesla’s stock has surged more than five-fold this year, while shares of General Motors Co and Ford Motor Co declined on fallout from the COVID-19 pandemic.
Shares of Tesla, up 61% since it announced what is its first stock split in mid-August, closed at $2,213.4 on Friday. They were priced up 2.33% at $453 when counted at their post-split value in pre-market on Monday.
Online brokerages Robinhood, Charles Schwab Corp and Fidelity, along with several smaller shops, have begun offering slices of individual shares.
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 ten a year over the past decade, according to S&P Dow Jones Indices.