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Tesla and Apple stocks could rise over 30% after split

Stocks

If the share prices of Tesla and Apple follow the pattern of other megabrands which split stocks, they could be boosted by a third, analysis has found.

Investment and social trading platform eToro analysed 60 years of data and found that, on average, brands saw their share prices rocket by more than 33% in the 12 months after a stock split.

Amazon’s shares rose by as much as 209% on average within a year of its three stock splits, according to eToro.

Tesla and Apple

Tesla and Apple have planned stock splits for 31 August, which will be the electric car maker’s first and the tech giant’s fifth.

Within three weeks of the announcements, 11 August for Tesla and 30 July for Apple, the sum of money eToro users invested in these shares globally shot up by 35% and 167%, the firm said, based on its data as of 24 August.

Adam Vettese, analyst at eToro, believes that Tesla and Apple could exceed that level of growth this time around, given the opportunity to buy into these popular companies at a lower price.

Existing Tesla shareholders will get five shares for every share they own, while Apple shareholders will get four.

On average, Apple’s shares typically rose by 10.4% in the year following the split, eToro said. In the 12 months after its June 2014 and February 2005 share splits, Apple’s shares rose 36.4% and 58.2%, respectively.

However, in the 12 months after its June 2000 share split, which was during the dot-com crash, the firm saw its shares plunge -61%, the firm said.

In its share split research, eToro focused on the 10 biggest global brands (see table below).

The news comes as research by Refinitiv Lipper found that investors have become ‘ultra-risk averse’ on the back of US record equity highs and redeemed, in particular, US core-oriented (-$19.1bn, €16.13bn) and large-cap funds (-$13.8bn) in July.

Source: eToro

 

Elena Johansson

Senior Reporter

Part of the Bonhill Group.