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."
Re:Stock Split does not... (Score:3, Interesting)
Re:Stock Split does not... (Score:2, Interesting)
Re:Stock Split does not... (Score:5, Interesting)
True, but the price of Berkshire Hathaway stock is currently $91,000 per share.
While nice for the stockholders, I'd expect that to limit liquidity somewhat, because there just aren't as many people with funds to buy stock at $91,000/share. Today only 290 shares traded. 3 month average volume is 393 shares. (It'd probably be harder to make an option-based incentive program work with so few shares outstanding. And you can pretty much forget about non-executive employees having stock in the company.)
Like it or not, many (probably most) investors are not perfectly rational creatures. They'll buy a stock, after a split, because the share price drops into a range that they find attractive or accessible.
If someone would like to invest in Apple right now, they might not have $8,000 available to buy 100 shares. On February 28, they'll be able to buy 100 shares for $4000 or so, which perhaps they can afford.
Now, if you're Homo Economicus ( a runtlike feral creature recently discovered in fossils on an island in Southeast Asia) you understand that halving the price doesn't necessarily make Apple any better of a buy. It's not like a half-price sale.
But most people aren't that rational. They invest like it is a half-price sale. Never mind that you're getting half as much of Apple when you buy a share.
Splitting a stock helps companies take advantage of this kind of behavior. At a given price, there will be people who want to buy, but can't. Halve the price with a split, and those people will buy, unless the fundamentals are atrocious. If the company was good enough to buy, pre-split, but cost too much, they'll buy post-split, which helps drive the price up again.
There's a big psychological factor. It's also part of why companies occasionally do a reverse split, to raise the price of their stock. If a stock is down around $5 or less, like Sun's, it just looks like a loser, fading into inconsequence.
Have the stock but (Score:1, Interesting)
beleaguered (Score:4, Interesting)
'Nuff said.
OK, maybe it's not. Let us all try to remember the number of times that adjective was used to describe the company. I don't think I can count that high. And yet...yet there are STILL nay-sayers...
Re:I'm a stupid fucking dumbass, should've bought! (Score:2, Interesting)
I started playing the market decades ago. I realized early on that analysts are good at picking stocks after the stock moves. Do you own research. My tip for you: Buy companies that have no debt.
Two years ago, at AAPL's low of $14.25, here's why it was screaming buy:
1) Cash per share at around $11. That means you get the rest of company for $3 a share.
2) No debt (see above).
3) Not selling a commodity product.
4) Not dependant on other people's technology. Unlike HP, Gateway, etc.
5) Better brand loyalty than any other product except for cigarettes.
6) Been down so long, everything looked like up.
All the analysts, at the time, had hold (i.e.sell it when you can) or sell (i.e. dump this sucker now!) ratings on the stock.
this is not about the analysts... (Score:2, Interesting)
It is the board of directors that okays the stock split and I would guess that they wouldn't want a repeat of what happened after the split in 2000 where it plummeted in value. Rather, it is likely that the board believes that there is real room for growth. For me this is a more reliable indictor than, as one poster put it, a bunch of "crack smoking" analysts.
I think Apple has the potential to provide real value to the consumer market. Not only with iPod, which is great, but with powerful, standards based, secure, trouble free machines. It is FreeBSD and a lot of clever and innovative engineering that has put them in this position.
Apple stock split and Mr. Dell (Score:2, Interesting)
Apple stock is helping me pay for a new home (Score:1, Interesting)
Funny thing is that this music stuff took me completly by surprise. I felt that Apple's stock should be rising 2 years ago because finally at that point they had the best hardware and software they've ever had. Then the iPod came out and BAM! Now, I have no clue how Apple stock is going to move. I ended up selling some shares at $27, $30, $40, $50, and $70, wondering at each time whether that would be its new peak. I don't feel bad, as I have a lot more stock that I will be holding on to.
I've managed to make enough of a profit on these shares that it will significantly help me pay for a new apartment! I feel as if my loyalty to Apple as a customer and as an investor has paid off. It was only my devotion to keeping up to speed on everything Apple that I attribute to this success. It just goes to show you that someone with the incentive to become well versed in a company can be as successful than professionals. They are looking at almost the same information that is available to the rest of us. We just don't have the time to do the research normally.
Anyway, I'm rambling. Just wanted to let you know that Apple fans may not only be rewarded with the best computers on earth, but also with cold hard cash too! Thanks Steve!