Tesla and Apple shares fall following big runs sparked by stock splits

  • Shares of Apple fell more than 4% from its record on Wednesday, while Tesla also slipped from its all-time high, dropping as much as 14.7%.
  • The duo has enjoyed huge rallies following the announcements of their stock splits, which aim to lure more interest from regular investors.
  • Apple soared nearly 40% since the tech giant declared the corporate action on July 30. Meanwhile, the electric car-maker skyrocketed more than 70% following the 5-for-1 stock split announcement on Aug. 11.

The massive boost from Apple and Tesla's stock splits is showing signs of running its course.

Shares of Apple fell more than 4% from its record on Wednesday, while Tesla also slipped from its all-time high, dropping as much as 14.7%. The duo has enjoyed huge rallies following the announcements of their stock splits, which aim to lure more interest from regular investors.

Apple, the only U.S. company with a market cap over $2 trillion, soared nearly 40% since the tech giant declared the corporate action on July 30. Meanwhile, the electric car-maker skyrocketed more than 70% following the 5-for-1 stock split announcement on Aug. 11.

Their splits took place on Monday, which sparked another knee-jerk pop in both stocks. Tesla jumped more than 12% that day, while Apple gained more than 3%.

A stock split theoretically could boost retail share ownership as the cheaper share price is more accessible for individual investors. However, it doesn't change a company's underlying fundamentals or the intrinsic value of its shares.

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Tesla's decline on Wednesday also came as its largest outside shareholder Baillie Gifford trimmed its position in the company to less than 5% from 6.3%.

The two companies have been among this year's biggest winners as investors continued to embrace high-growth tech as well as the booming electric vehicle market. Shares of the Elon Musk-led company have soared a remarkable 460% in 2020, while Apple has risen more than 80%.

Amid the incredible run, Tesla said Tuesday it will sell up to $5 billion in new shares.

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