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
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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