“Everyone’s talking about it [the stock split],” said Howard Silverblatt, senior index analyst for the index, on Thursday
Silverblatt said that he believes that many companies may at some time follow Tesla and Apple’s stock split to attract more retail investors, even if it is almost a “cosmetic surgery” for enterprises and may be more expensive.
“will other enterprises split shares? I think so. Tesla and Apple may not be the only companies that will split shares. ” Silverblatt said.
Apple announced on July 30 that it would carry out a 1:4 stock split, which will take effect on August 31. After the announcement, Apple’s share price had risen nearly 20% by the end of Thursday. Earlier this week, Tesla said it would complete a 1:5 split by August 31, which also boosted the company’s share price further.
stock splits were once a common phenomenon on Wall Street as companies tried to make their share prices more attractive to ordinary investors. Back in the Internet boom of the late 1990s and early 2000s, stock splits were all the rage (below). But now it’s rare.
according to the data, although the current average share price of listed companies is up to $149.32, Tesla and apple are still the only two companies to split shares so far in 2020. In 1997, 102 listed companies split their shares, the highest number in the past 30 years, and the average share price was only $51.08.
now, the discussion about stock splitting comes at a time when retail investors find themselves in a line Commission, and many trading platforms only provide partial ownership of shares, which makes it relatively easy for retail investors to buy a small amount of shares of enterprises at a lower cost.
most importantly, retail investors have recently made aggressive and relatively successful bets on “anti epidemic concept stocks”, thus attracting new and young investors to join the stock market.
this may reduce the reasons for the stock split to attract retail investors, but supporters say creating an environment conducive to retail investors is a long-term good for the entire stock market and businesses.
but Lindsey bell, chief investment strategist at ally invest, said earlier that Apple’s announcement of the split was “difficult to say if it was the beginning of a new wave of stock splits.”. She pointed out that only Netflix followed Apple’s announcement in 2014, which completed a 1:7 split in July 2015.