Apple (AAPL) and Tesla (TSLA) both made share gains on Monday after the two companies’ recently announced stock splits came into effect.
Apple revealed its plans for a four-for-one stock split in its Q3 earnings report in late July, a move that is designed to increase appeal to a wider base of investors.
Tesla followed suit with a five-to-one split in early August.
Both became effective after the first bell on Monday, and the two tech giants eased higher in early trading.
At 1:50pm ET on the Nasdaq, Apple shares were up 4.79% to $130.73.
Tesla went a bit higher, rising 10.04% to $486.86 on the Nasdaq.
The latest gains follow a historical trend that shows that splits generally lead to stocks outperforming the market in the days after the distribution.
This is because investors look favourably on splits as a bullish signal for long-term growth.
Since the stock splits were announced, Apple has climbed 32%, while Tesla has soared by more than 70%.
However, billionaire investor Leon Cooperman warned that the latest runs on AAPL and TSLA stock could be concerning as the splits do not add value in themselves.
He noted: “Look at Tesla and Apple: Everybody understands that splits don’t create value. My dad once told me if you gave me five singles for a $5 bill, I’m no better off.”
There was a large volume of Apple shares being traded on Monday morning.
During the first 90 minutes of the session, 82.7m AAPL shares had changed hands – a surprising number considering that its 30-day volume average is 178.588m.
Tesla traded 37.4m shares during the same period against its 73.369m 30-day volume average.
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