Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research may determine where and how companies appear. Learn more about how we make money.

Published: Aug 31, 2020 4 min read

Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.

Getty Images

Since Apple and Tesla announced their stock splits earlier this summer, investors and analysts have been scrambling to figure out what the move could mean for the companies which both recently hit record highs. Now, the day of the stock splits is here.

Apple’s stock closed Friday at $124.81 — the price adjusted for the split — and immediately rose as the market opened this morning, reaching $129.95 in early afternoon trading. Meanwhile Tesla closed Friday at $442.68, and also began rising, as high as $481.04.

The jumps aren’t representative of the overall market as the Dow Jones Industrial Average fell 200 points.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
To properly manage your portfolio, Online Stockbrokers can lend you their expertise.
Stash and their team of Online Stockbrokers offer affordable help for priceless peace of mind. Get the right pro to handle your portfolio today. Click on your state for more information.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Start Investing Today

What the stock split will look like for you

A stock split is when a company divides its shares so the number of shares an investor owns increases (or falls in a reverse-split), without affecting the stockholder's actual ownership stake in the company. A 2-for-1 split would turn a share of stock that trades at $100 into two shares that trade $50, while a 4-for-1 split would turn it into four shares of $25.

If you held shares of Apple stock by August 24 or Tesla by August 21, these stock splits will happen automatically — there’s nothing you have to do.

Apple’s split is four-for-one, so if you owned 100 shares trading at around $400, you now owe 400 shares with a valuation of $100 per share. And Tesla’s was five-for-one, meaning if before the split you held 100 shares trading at roughly $1,500 each, you now own 500 which are valued at about $300 each.

And don’t worry about paying extra taxes — you won’t need to pay any taxes on the additional shares you get after the splits.

So, what’s next?

Companies don’t tend to do a split like this if they think there’s a possibility its shares price is going to fall. And Apple and Tesla have had a booming 2020 despite the market volatility and pandemic-induced recession. Apple also has a new product it may be banking on: the iPhone 12, expected to be released this fall. This comes after the news on August 19 that it had become the first U.S. company to be worth $2 trillion.

Tesla, meanwhile, is looking to boost sales with its business in China.

And the stock split may mean more interest from retail investors as the new prices are far more accessible. (Tesla’s stock closed at $2,213.40 Friday — likely out of the realm of a buying possibility for a lot of everyday investors).

While the splits make the companies’ stocks more affordable, both Apple and Tesla’s stocks are a lot more expensive than they were at the beginning of 2020 — Apple up 70% and Tesla up 440% before the split. That’s good news for those who rode the gains, but it also makes both stocks a lot riskier for investors now.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Discover the investment app that's changing how people invest in 2023
Follow other investors, discover companies to believe in, invest with any amount of money.
View App Details
ETFs, treasuries, crypto and alts are available to US members only. Stocks and ETFs are through Open to the Public Investing, member FINRA & SIPC. Full disclosures for other providers at .

More from Money:

Congratulations! You Won Big Betting on Tech Stocks. Now Start Selling Them

Warren Buffett Just Bet Big On Gold Miners. Should You?

High-Yield Savings Rates Have Tanked, but These Overlooked Accounts Still Pay 2% or More