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Have you heard…
On August of 2020, the two giant companies: Tesla ( ), a manufacturer of motor vehicles, and Apple ( ), a technology and communications producer, detailed plans to split their own stocks.
While these two corporations are known as among the two most profitable industry leaders in the world today, investors wanted to know how the ‘split decision’ will affect the stock value of both companies.
To say it simply…
A “Split Stock” literally split a stock into a ratio decided by the company.
In this case, Apple set theirs at four for one, while Tesla settled for a five for one ratio.
In the case of Apple, if you have 10 Apple shares—by following the 4 to 1 ratio—you’ll end up with a total of 40 shares following the split.
While the value of each stock, will of course reduced its value in relation to the ratio figure, the split will not alter the worth of your over-all share holdings.
Sometimes, a reverse split is decided. This means a reverse five-for-one split will condensed your five shares into one.
Not so surprisingly enough…
Financial insiders explain that it isn’t a surprise why both companies decided to split their stocks.
It is rather expected since the stock value of both companies have continued to increase over the years.
Here’s the deal:
By splitting their stocks, the price of their individual shares will be reduced without causing an effect on the company’s total holdings and market cap.
Imagine a company’s stock reaching more than $1000? this will extremely limit the potential of attracting more investors as not everyone can afford to shell this amount of money per stock.
By splitting a stock, it becomes more attractive to investors.
And that’s not all…
Apple already performed a split a total of five times before!
They decided on a 2 for 1 ratio the first three times they did it and in 2014, they divvy up their stocks 7 to 1 to slash their then more than $700 stock price to a little more than $100 each.
For Tesla, this is the first time for the hybrid car manufacturer to split their stocks.
And guess what?
Facts gathered by a team of financial experts who conducted to study the effects of split stocks, showed companies who announced an upcoming splitting of stocks gain an average of 2.3% before the actual stock split happens.
And here’s what makes it more interesting:
Following the split, companies experienced consistent increase in their stocks of up to 10%!
So why do stocks split?
Here’s the thing…
While it is not common for companies to split their stocks, it isn’t unique either.
Companies have been doing this for many reasons such as to make their stocks a lot more affordable to many investors.
Plus, almost all who split their stocks in the past experienced gains.
And the good news…
Financial analysts say, investors have nothing to worry about a company splitting their stocks.
Here’s another interesting thing…
A split stock won’t have any effect on many traders, especially the ones who uses the eToro Trading Platform.
This is because eToro offers fractional shares of stocks for as little as 0.001 of a share.
Now get this…
A Unanimous Decision on Buying Split Stocks
As Apple and Tesla’s split stocks take effect on August 31, 2020, the new stock value of both companies will also reflect on eToro’s trading platform at the same time.
For existing holders of Apple and Tesla’s stocks, they won’t notice any difference other than the total number of the stocks that has been split already.
As existing Apple and Tesla stock owners, you don’t have to do anything.
But for those who are just about to buy or are just planning to invest on Apple and Tesla stocks, this is the perfect time as you can easily decide on how many shares you will invest based on the new split prices of the companies’ stock.
How can you actually use this?
By using eToro’s Trading Platform, you’ll easily reach a unanimous decision on investing on the two high-yielding portfolios of Apple and Tesla.
Looking at the future…
As the splitting of Apple and Tesla may give more chances for traders to invest on the two companies, this wonderful opportunity adds to the many positive forecasts that awaits these two companies in the future.
So, what are you waiting for?
Seize this golden opportunity with the help of the eToro trading platform for you to investigate not only investing on Apple or Tesla, but also on other emerging companies.
eToro’s ready-made investing portfolios will easily guide you take your trading to the next level.
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