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Apple CEO Tim Cook greets customers at the grand reopening of Apple’s flagship Apple Fifth Avenue retail store on September 20, 2019 in New York City.
Taylor Hill | Getty Images
Shares of Apple and Tesla rose sharply on Monday, the first day after their recently announced stock splits took effect, as investors continued to pile into the popular names.
Apple advanced 4% and was the best-performing component in the Dow Jones Industrial Average. Tesla, meanwhile, jumped around 10%.
Monday’s gains are just the latest in a string of strong performances since the two companies announced they would be splitting their stocks.
Apple said July 30 its board approved a 4-for-1 stock split. Since then, the stock is up more than 32%. Tesla announced a 5-for-1 stock split on Aug. 11 and the stock has skyrocketed more than 70% since then.
However, legendary investor Leon Cooperman thinks these run-ups on the back of stock-split announcement are a troublesome sign for the market.
“Look at Tesla and Apple: Everybody understands that [stock] splits don’t create value,” Cooperman, the founder of Omega Advisors, told CNBC’s “Squawk Box” on Monday. “My dad once told me if you gave me five singles for a $5 bill, I’m no better off.”
Monday’s gains in Apple and Tesla come amid high volume as smaller traders are able to snap up shares in both companies at a much lower price point than Friday.
Through the first hour and a half of Monday’s session, Apple had traded 82.7 million shares, which is roughly 46% of the stock’s 30-day volume average of 178.588 million. Tesla shares had exchanged hands 37.4 million times, more than half of its 30-day volume average of 73.369 million.
This year, smaller traders have been more actively participating in the market as commission-free online brokerage Robinhood grows in popularity. But Cooperman sees this as a potential sign of being overheated.
“I see signs of euphoria creeping into the market: the IPO SPAC market is one, [and] the craziness in many of the stocks that the Robinhood crowd has latched onto,” Cooperman said. “You see a Kodak go from $1.50 to $60 and from $60 to $6 in a very short period of time … and when you look into it, it’s the Robinhood crowd taking it up.”
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