Positions I’m Watching: Tesla and Apple

By: Stacey Nickens

Both Tesla and Apple announced stock splits that go into effect on Monday, August 31. Apple is undergoing a 4:1 stock split, meaning that for each share of Apple stock you own, you will own four times that amount on August 31. Similarly, Tesla is enacting a 5:1 stock split. This means that, for each share of Tesla stock that you own, you will own five times that amount when the split occurs. Stock splits don’t specifically increase the value of your holdings. Rather, pretend your holdings are like a piece of chocolate that’s been split into smaller pieces. The piece of chocolate hasn’t grown or shrunk; it’s simply been divided among smaller shares.

Why are stock splits interesting? Stock splits decrease the value of individual shares and thus make them more accessible to investors. This could increase the trading volume for Tesla and Apple’s shares. Investors with Tesla and Apple shares could thus see promising gains. For example, on August 31 around 2:15 PM (ET), Apple shares were up 4.8% while Tesla shares were up 9.7%. While both Apple and Tesla are still overvalued at around $130 and $485 per share, respectively, it could be interesting to keep an eye on these growth-oriented opportunities.

What to learn about other investment opportunities? Read more about why I recommend home improvement stores, RV manufacturers, and the QQQ.

Disclosures: Past performance is not a guarantee or a reliable indicator of future performance. All securities carry a unique set of risks subject to a variety of factors. There is no guarantee that these investment strategies will work under all market conditions or that they are are suitable for all investors. This material has been distributed solely for informational purposes and should not be considered as individual investment advice or recommendation. Individuals should consult their investment professional prior to making an investment decision.