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."
Shoulda coulda woulda (Score:2, Insightful)
Re:Shoulda coulda woulda (Score:3, Funny)
With hardware, they'll upgrade before you have have time to put your card back in your wallet.
With software, it's often the same - unfortunately, those sellouts at Cupertino at making upgrades cheaper, or free (a la FCP-HD).
I must say, this is a very refreshing move. Let's see how long it takes them to get to $80 again
Re:Shoulda coulda woulda (Score:1)
Re:Shoulda coulda woulda (Score:5, Funny)
I, personally, would be buying some o' that fruity goodness right now... were it not for the fact that I'm broke. Worse yet, I'm broke in Australian Dollars.
Yet another piece of Apple I'm destined to drool over, but never own...
Re:Shoulda coulda woulda (Score:5, Insightful)
Re:Shoulda coulda woulda (Score:1, Troll)
Re: (Score:2)
Stock Split does not... (Score:2, Informative)
Re:Stock Split does not... (Score:3, Interesting)
Re:Stock Split does not... (Score:1)
Talk to anyone with some knowledge on investment, finance, or accounting they'll tell you the same. If you think you're going to make money off of a split go ahead keep thinking that, but you're wrong. Your gain won't be a result of the split that's for sure.
Re:Stock Split does not... (Score:1)
Re:Stock Split does not... (Score:1)
Re:Stock Split does not... (Score:1)
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.
Re:Stock Split does not... (Score:2)
It would seem to be a heck of a lot less paperwork to just make the minimum tradeable parcel be 50 shares instead of 100. Then they wouldn't have to send out new certificates to everyone.
Actually, I've got no idea why it's so high in the USA in the first place. Here in New Zealand most companies keep
Re:Stock Split does not... (Score:2)
That's why they issue Series B [yahoo.com] shares, which have considerable volume.
That's all I've been able to afford so far. It's a nice hedge against trendiness in the market, yet typically yields better than a bond fund.
Re:Stock Split does not... (Score:2)
Considerable, compared to the other Hathaway stock, but still only 19,000 shares or so. That's orders of magnitude smaller than most stocks.
Also, at over $3,000 per share, it's still too pricey for most investors, who'd rather not risk so much of their money on a single stock.
Re:Stock Split does not... (Score:2)
Exactly right, and this is on purpose. Here's Buffet's take on it:
Re:Stock Split does not... (Score:1)
Re:Stock Split does not... (Score:2)
The other reason to do a reverse split is that the Nasdaq and NYSE both have minimum price requirements to be listed on their exchanges. If a company's price per share drops below a threshold value for a certain amount of time (something like under $1.00 for a week or more) then it can be delisted (the actual process is much more complicated than this). From there, the company goes into the murky world of Over-the-Counter (OTC), Bulletin Board
Re:Stock Split does not... (Score:1)
Re:Stock Split does not... (Score:1)
Stock splits are actually an anachronism going back to the 60's when stocks were traded as either even lots (multiples of 100 shares) or odd lots (anything else). Even lots had the advantage of lower commisions. Companies would split their stock in order to bring the price of an even lot down to an affordable level thereby boosting demand. Individuals made up the bulk of trading back then.
Take BH, for example. Not
Re:Stock Split does not... (Score:1)
Before you start going around calling people dumbasses, do you remember what happened the last time AAPL split?
Re:Stock Split does not... (Score:2, Interesting)
Not even that (Score:3, Insightful)
Before share split: 50,000 shares own a company. Compant has $1m earnings, makes $20/share earnings
Stock splits 2:1 but company fundamentals stay the same (simplisitc, but no reason splits affect the earnings of a company).
,br> Company still earns $1m. But not t has 100,000 shares that makes it $10/share. If shares are values on a fundamental basis it makes no difference. If shares are viewed on a tachnical basis (see technincal analysis [wikipedia.org], the opposite of 'fundamental analysis') i
When Apple splits... (Score:4, Funny)
Or even worse, half a worm.
(I know, I know, corny old joke... but I just couldn't resist!)
I'm a stupid fucking dumbass, should've bought!!!! (Score:5, Funny)
About 2-3 years ago I almost convinced myself that I should buy Apple stock. At that time, each share cost about 16 bucks...
I didn't buy any, thinking that I was maybe being a victim of St. Steve Job's reality distortion field (I'm as big an Apple fan as you can get) and that maybe the stock would plunge. After all, we were stuck with that damn G4. (And it kinda feels strange to buy stock when you're still in high school.)
Then iTunes Music store came out of nowhere. The stock litteraly exploded. Still didn't buy, thinking "economics 101: buying when high (the price, not me
Now the stock is at 81 dollars, that's a 65 $ increase per share, damnit. And yaknowhat? I still won't buy, cause I really don't see how it would rise again?! Maybe if Apple announces OS X for PC (see "Fortune" article). Maybe if they sell half a billion mac minis. Maybe if someone finds out that the iPod shuffle solves cancer, AIDS and world hunger. Maybe.
Anyways, it sort of confirms what I always thought about stock markets: those fucking "analysts" are on crack all the time. I mean, that Apple stock was vastly underrated three years ago. Now it's completely overrated, Apple is in good shape and all, but it's simply not that worth! There's no way in hell Apple is worth 72,9 BILLION dollars (900 million shares @ 81 dollars. I know, I'm vastly oversimplifying, but still...)
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
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)
Apple Announcement [apple.com]:
CUPERTINO, California--February 11, 2005--Apple® announced today that its Board of Directors has approved a two-for-one split of the Company's common stock and a proportional increase in the number of Apple common shares authorized from 900 million to 1.8 billion.
(IANASME: I Am Not A Stock Market Expert)
Re:I'm a stupid fucking dumbass, should've bought! (Score:2)
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
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 s
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
Re:I'm a stupid fucking dumbass, should've bought! (Score:2)
And yes, I'm entirely serious about this. The thing is, being me, it was only 20 shares. Still, an extra grand I didn't know I'd have a few years ago...best investment I've ever made. Well, best one I've made and cashed out already. The others are yet to be seen.
Re:I'm a stupid fucking dumbass, should've bought! (Score:2, Insightful)
Be happy with the profits you made and don't cry over profits you missed.
Re:I'm a stupid fucking dumbass, should've bought! (Score:2)
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
One example: Back in 1983 or 1984, I bought Hitachi (HIT) at 28. After about year, the stock was floating in the 50's. I sold at 54. Not bad, almost a two-bagger. Two weeks later it was at 70. It finally topped out at 120.
It's easy to know when to buy. The hard part is to know when to sell.
Re:I'm a stupid fucking dumbass, should've bought! (Score:2)
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
Remember the "Greater Fool Theory": You can always find someone stupider that you are to will buy something from you.
Eventually you hit the end of the chain. There is nobody stupider than you.
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
Everyone is kicking themselves for not buying at 16, 20, 24, etc... But, if you bought at $60 you still would have made gains. So, who's the bigger dummy: The person who didn't but at all, or the person who bought at $60?
You don't buy a stock because "it's cheap". You buy it because you be
Re:I'm a stupid fucking dumbass, should've bought! (Score:4, Insightful)
Let's suppose that J. Q. Publicus *is* approaching a tipping point with regard to frustration about virus/worm/adware crap. If that 3% market share were to grow to, let's say, just for purposes of illustration, 9%, then the earnings contribution by Mac sales will AT LEAST triple, due to manufacturing efficiencies, no additional development expenses, yada yada yada. Suddenly today's pricing of the stock doesn't look so extreme anymore.
That is a simple rationale. Others are based on the theory that the world market for digital music will grow A LOT -- and since Apple *owns* that market, their revenues will grow with it.
One is (or should be) always looking for instances of where the "efficient market" is out of step with reality. Many times, one is wrong. But the essence of investment theory is to search out, using various metrics (technical "analysis", Ben Graham's work on valuation, astrology, whatever works), these instances of where the efficient market isn't, evaluate the risk, take a position, and wait for reality to catch up.
Those who invest via the "driving throught the rear view mirror" approach are destined to run off the road and crash. To properly invest, one has to look ahead (as well as behind and side-to-side), and not drive faster than conditions dictate (i.e., if you leverage yourself to the hilt and can't react quickly enough to the potholes in the road...), and be cognizant that the road ahead (that would be the future) is almost always enshrouded in fog.
As to whether Apple is priced fairly today, it depends upon exactly what future unfolds for it.
BTW... I *did* buy back then (a bit later, actually), based upon valuations and the huge pile of cash Apple was sitting on. I'm still holding it, waiting to see where it will peak. I look for it to sell off a bit sometime this year, and if there are signs that the Mini Mac is selling strongly into the Windows domain, I'll probably buy some more. However, it could just as well turn out that Apple drops the ball and is unable to satisfy demand, or that the hoped-for demand never materializes.
If you can't identify market inefficiencies, or foretell the future with some degree of accuracy, stick to index funds.
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
Re:I'm a stupid fucking dumbass, should've bought! (Score:1)
bought apple stock after OSX (Score:5, Insightful)
There formula for success is the same as google's. Build an efficient user-experience over a solid backend.
Re:bought apple stock after OSX (Score:1)
Look who's laughing now!
Nyah Nyah! I have 1 whole share! (Score:1)
I have 0 and now I had twice 0! (Score:3, Funny)
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...
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
Apple stock split and Mr. Dell (Score:2, Interesting)
Not a good sign (Score:5, Funny)
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.
I bought! (Score:1)
Re:I bought! (Score:1)
OMG (Score:4, Funny)
Wall Street Confirms it: Apple is dying.
Apple stock is helping me pay for a new home (Score:1, Interesting)
Sigh (Score:2)
And that was my brief foray into the stock market....