Stocks: Apple and Tesla Keep Rising To Peaks After Stock Splits -- WSJ
September 01 2020 - 3:02AM
Dow Jones News
By Karen Langley
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 1, 2020).
Apple Inc. and Tesla Inc. shares rose to new heights Monday
after their stock splits took effect, extending their meteoric
rallies this year.
Apple added $4.23, or 3.4%, to $129.04 after the tech giant's
shares began trading following a 4-for-1 split, essentially giving
investors three more shares for every one they owned. Tesla shares
jumped $55.64, or 13%, to $498.32 after the electric-vehicle
maker's 5-for-1 split. Both stocks closed at records.
Since announcing plans for the stock split on July 30, Apple has
risen 34%, in the process becoming the first U.S. public company to
surpass $2 trillion in market value and extending its gains for the
year to 76%. Tesla shares, meanwhile, have surged 81% from the
company's Aug. 11 stock-split announcement and have more than
quintupled this year.
The companies have said the splits are intended to make their
shares more accessible to a wider base of investors. Stock splits
leave the market values of companies unchanged but lower the price
tags of individual shares.
Some investors monitoring their accounts over the weekend,
though, may have seen positions that looked like even bigger
winners.
Investors on Twitter said the websites of money managers
Vanguard and Fidelity Investments briefly showed their assets were
vastly inflated. In some cases, the platforms had increased the
share counts without reducing the share prices.
"The stock splits -- and associated increase in number of shares
-- went into effect after market close on Friday," Vanguard
spokesman Charles Kurtz said in an email. "The new split-adjusted
prices went into effect before markets opened this morning. In
between, clients may have temporarily seen inflated position values
as a result of their new number of shares but pre-split
prices."
Vanguard brokerage account clients who own Apple and Tesla
shares were alerted when logging into their accounts that they
would see larger positions than they actually held, Mr. Kurtz said.
He said trading was disabled for both stocks from the close of
business Friday to when the price adjustments took effect
Monday.
"The vast majority of our customers holding AAPL and TSLA saw
positions and prices adjust for the splits on Saturday, via our
website," Fidelity spokesman Robert Beauregard said in an email.
"All customers would have seen updated positions and prices prior
to market open today."
Also Monday, three new components joined the Dow Jones
Industrial Average in conjunction with Apple's stock split.
Salesforce.com Inc., Amgen Inc. and Honeywell International Inc.
replaced Exxon Mobil Corp., Pfizer Inc. and Raytheon Technologies
Corp.
Shares of four of those six companies ticked lower on the day,
as did most stocks in the average, while Salesforce rose 0.6% and
Amgen added 0.1%. Since the shake-up was announced last week,
shares of the new additions have gained ground, led by Salesforce
with a jump of 31%. The former members have slipped, with Exxon
down 5.4% and Pfizer falling 2.7%.
To prevent the substitution of Dow members or the split of a
member's stock from jolting the overall index level, such changes
are accompanied by an adjustment to the divisor used to calculate
the average.
A $1 rise in the price of any stock in the Dow Jones Industrial
Average now adds 6.58 points to the benchmark as a whole, the
lowest multiplying effect since March 18, 2015, according to Dow
Jones Market Data. Last week, a $1 change in a member's stock price
corresponded to a 6.86-point change in the benchmark.
Write to Karen Langley at karen.langley@wsj.com
(END) Dow Jones Newswires
September 01, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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