Apple, Tesla, and Stock Splits on M1

What is a stock split?

A stock split is a change in the number of shares that are outstanding. It’s a decision typically made by a company’s board of directors.

Recently, companies like Apple (AAPL) and Tesla (TSLA) announced stock splits. Apple announced a 4-for-1 stock split, and Tesla announced a 5-for-1 stock split.

Before we talk about those splits specifically, let’s go through what happens in a split.

6 stock tickers with pie names, and a magnifying glass

How do stock splits work?

Let’s walk through an example stock split scenario.

Say we have a company that recently announced a 2-for-1 stock split. We’ll call them BLBRY.

In a 2-for-1 stock split, one additional share is given for each share held by a shareholder. If BLBRY had 5 million shares outstanding before the split, it would have 10 million shares outstanding after it.

Additionally, the price would be adjusted according to the split. In this case, the share price would be halved. But since the number of shares increased, the value wouldn’t change.

In this example, let’s say BLBRY’s pre-split share price was $2 per share. Post-split, the price would change to $1 per share.

That means that before the split, BLBRY was worth $10 million (5 million shares x $2 per share). After the split, BLBRY’s market capitalization (value) remains unchanged: 10 million shares x $1 per share = $10 million.

If you’re an M1 client, the split-adjusted information will typically show up one business day after the stock split.

3 pies with a lightbulb in the center pie

What should I know about AAPL and TSLA’s stock splits?

Like we said before, Apple is undergoing a 4-for-1 stock split and Tesla is undergoing a 5-for-1 stock split.

On M1, both splits will be applied after market close Friday, 8/28/2020. They will be in effect for trading on Monday, 8/31/2020, though some historical data may be out of sync until after market close.

Shareholders can expect the share price to split and the number of shares they own to multiply according to each company’s announcement. The relative value of the shares will not change.

If you own fractional shares of Apple or Tesla, they will be treated like whole shares. For example, if you own 0.1 shares of TSLA, you would own 0.5 shares of TSLA after the split.

Unless you want to buy or sell any shares, you don’t need to do anything at this time. We’ll take care of the split on our end.

You can learn more about Tesla’s announcement here, and about Apple’s announcement here.

support person at computer

Should I expect market volatility when these go into effect?

There is always a chance for market volatility, but the relative value of your shares will not change. If it helps, here’s how we think about market volatility.

Is this what happens with a merger or acquisition?

Stock splits are not the same as mergers or acquisitions. Those involve changing ticker symbols and may require taking a quick step on M1. Learn more about acquisitions on M1 here.

P.S. M1 does not provide recommendations or advice. Any mention of a specific stock or company is for information purposes only.

Check the background of M1 Finance LLC on FINRA's BrokerCheck

By using this website, you accept our Terms of Use and Privacy Policy and acknowledge receipt of all disclosures in our Disclosure Library. All agreements are available in our Agreement Library. M1 relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.

M1 refers to M1 Holdings Inc., and its affiliates. M1 Holdings is a technology company offering a range of financial products and services through its wholly-owned, separate but affiliated operating subsidiaries, M1 Finance LLC and M1 Spend LLC.

M1 Plus is an annual membership that confers benefits for products and services offered by M1 Finance LLC and M1 Spend LLC.

All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using M1 Borrow’s margin account can add to these risks, and you should learn more before borrowing. Nothing in this informational site is an offer, solicitation of an offer, or advice to buy or sell any security and you are encouraged to consult your personal investment, legal, or tax advisors.

Brokerage products and services are not FDIC insured, no bank guarantee, and may lose value. Brokerage products and services are offered by M1 Finance LLC, an SEC registered broker-dealer, Member FINRA / SIPC.

M1 Spend checking accounts furnished by Lincoln Savings Bank, Member FDIC. M1 Visa® Debit Card is issued by Lincoln Savings Bank, Member FDIC.

Credit Card not available for US Territory Residents. Review Cardholder Agreement and Rewards Terms for important information about the Owner’s Rewards Card by M1. The Owner’s Rewards Card by M1 is Powered by Deserve and issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

200 N LaSalle St., Ste. 800 Chicago, IL 60601

© Copyright 2021 M1 Holdings Inc.