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Home / Business / Apple and Tesla just announced a stock split. Here’s what this means for your investments

Apple and Tesla just announced a stock split. Here’s what this means for your investments



Here’s what you need to know if your stock is being divided into two (or three, or four, or five).

The stock split does exactly what it does Sounds like: A stock is divided into many stocks, does not change the total value of the holdings of investors. They are simply broken down into more individual units.

So who benefits from the stock split?

Lowering the price of a company’s stock may put its stock in the sights of smaller, individual investors. That is good for company liquidity and creates more demand for company shares.

On Monday, Apple, one of the most valuable companies in the world, announced a 4-for-1
share split, which will go into effect August 31st. A share was traded at around $ 450 on Wednesday. Starting September, that figure will be close to $ 100.
This will be Apple’s fifth share split since going public.

The price change will be even more dramatic at Tesla, which trades at more than $ 1,500 per share on Wednesday. Its 5-get-1 split, also established on August 31, will put an individual share in the $ 300 range.

That’s not exactly cheap yet, but it’s been a boon for both companies whose stock values ​​have risen even more since they announced their move.

Meanwhile, some companies do not completely split their stock and just observe their share value rising ever higher. One such example is Warren Buffet’s Berkshire Hathaway.
Berkshire’s class A (BRKA) shares ended Wednesday at close to $ 320,000 a share. You can do math on the number of ways one might want to divide that stock. Of the company Grade B (BRKB) shares, which have been divided in the past, are priced at $ 213 a share that is much more affordable.

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