Everyone's an Investor Following Apple and Tesla Stock Split

Mahlik Campbell entertainment /
CUPERTINO, CA - MARCH 25: Apple Inc. CEO Tim Cook speaks during a company product launch event at the Steve Jobs Theater at Apple Park on March 25, 2019 in Cupertino, California. Apple announced the launch of it's new video streaming service, unveiled a premium subscription tier to its News app, and announced it would release its own credit card, called Apple Card. (Photo by Michael Short/Getty Images)

Casual investors and others rushed to buy Apple and Tesla stock on Monday, motivated by the firms' respective 4-for-1 and 5-for-1 stock splits. Essentially, this move means buyers will receive 4 (Apple) and 5 (Tesla) shares for the price of one.

The stock split reduces the price of each share, making them more affordable and, hopefully, attracting a wider range of investors. Looking at the enthusiastic reaction online, this strategy seems to be working.

It's the fifth time Apple has offered a stock split since going public in 1980. The company's last split happened in 2014 at a 7-for-1 ratio. Before then, it went 2-for-1 with investors on three separate occasions.

Apple is enjoying a record year in which it became the first company to achieve a $2 trillion market cap or a total stock value, which has also risen more than 70% in 2020 and peaked above $500 per share.

Meanwhile, Tesla's stock has recently been trading near $2,300 per share – a roughly 50% gain after announcing its stock split. At the end of the day on Monday, its share price had gone up 12.5%. With the stock split, it closed at $498.32.

Retail investing has surged this year. According to the trading app Robinhood, it added more than 3 million funded accounts during the first four months of 2020.

Half of their new customers claimed they were investing for the first time.