Apple Announces 2 for 1 Stock Split 73
neosar82 writes "Yahoo has a story about Apple's stock split. Apple Computer Inc. whose shares have almost quadrupled in value over the last year on the success of its iPod music player, on Friday said it set a 2-for-1 stock split, and its shares rose almost 4 percent. Under the share split, Apple shareholders of record at the close of business on Feb. 18 will receive one additional share for every outstanding share held. Apple said trading will begin on a split-adjusted basis on Feb. 28."
Stock Split does not... (Score:2, Informative)
Re:I'm a stupid fucking dumbass, should've bought! (Score:3, Informative)
You're right, they aren't. They are only worth half that. Apple's market cap is currently at 33.18 Billion (408 million shares at ~$81).
Splitting your stock doesn't affect your market cap. When the stock splits the price per share will be halved. So they will still be worth 33.18B (816 million shares at ~$40.50).
Re:I'm a stupid fucking dumbass, should've bought! (Score:2, Informative)
In the corporation charter, there is a statement that the the company is authorized to issue x number of shares. The company is allowed to sell to the market any number of shares up to that number. Essentially, it is a license for the company to print its own money. The currency in this case is shares. And just like any currency, if you print too much the value of each share will go down. That's why shareholders have to approve any increase in authorized shares.
"Outstanding shares" are the subset of "authorized shares" that have already been sold to investors. Usually companies never issue anything close to the number of shares they are allowed to. (Red flag if they do.)
Market Cap = Outstanding Shares x Share Price
The way to think of stock is that it's like a currency with the price as the exchange rate.
A Random Walk (Score:4, Informative)
If Apple is trading at pretty close to the top of their market ( aside from Tiger and the new Apple Portable Campstove a/k/a a G-5 laptop and whatever the Mini turns out to be) and there doesn't seem to be any Insanely Great stuff in the pipeline. .
Buying at or around the split is buying "high" - however, if the Mini really does make significant inroads into the Wintel world or becomes a home entertainment center - then the split allows more shares to trade and trade volume could increase....and, share price might go up.
If you want to wager - well, the market odds are not as bad as a casino... most of the time (e.g. ENRON).
Stick with a well-diversified portfolio and enjoy the fact that the Bond market will beat Bush into line sooner or later over the deficits.