“The speculation here was that [Apple’s 7-for-1 stock split] would simplify things for investors,” Philip Elmer-DeWitt reports for Fortune. “The stock’s all-time intraday high, set on Sept. 21, 2012, was $705.07. The 7 for 1 split would reset it at $100 plus change.”
“But as one reader points out by e-mail, Apple’s aggressive repurchase program has significantly reduced the number of shares outstanding — from 899.7 million Q4 2012 to 861.4 million in Q2 2014,” P.E.D. reports. “‘$770 is the new $705,’ he writes. Or, if you prefer, $110 is the new post-split $705.'”
Full article here.
MacDailyNews Note: Buybacks aside, Apple’s all-time high is $705.07, set during trading on September 21, 2012. Now that the 7-for-1 split has taken effect, Apple’s split-adjusted all-time high stands at $100.72.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]
Apple’s prior dividend of $13.16 per year (or $3.29 per quarter) will now be reflected as $1.88 per year or $0.47 per quarter.
One Hundred is the new black
hjs, Should I call myself centurion?
why not, safer than belvedere
Only 8 more bucks and we’ll be back to $100 (or $700 pre split). The only downside is that I get less stock at each dividend reinvestment.
aapl up 15% YTD and 46% for a full year. No too shabby.
Not really; proportionally, you’ll get the same amount as before, since the relation of stock price and the dividend hasn’t changed. If your dividend from, say, 200 shares of AAPL allowed you to buy 6 more shares of AAPL, you’ll still be able to buy six more shares; the divident amount would be smaller, just as the share price is. Obviously, if you had the total of 200 shares before, you now have 1,400 shares.
The point of the whole story is, absolutely NOTHING changes, other than the arbitrary number that is the relative share price (and the corresponding number of total number of shares).
Technically true, but almost irrelevant. The lower stock price makes it easier for people to buy who wouldn’t consider a $700 stock. Who wants to say they own one share of anything? This allows investors on a budget to start small, have multiple shares to feel good about it, and eventually get to the point of buying blocks of shares when they can afford it. The hardest step to becoming an investor is the first step.
Apple is up 1.6% today with nothing special to account for it but the new split price. People like Apple, and this move allows them to play, too.
Hey GM,
Aren’t you glad you sold only to miss out on all the dividends since and pay capital gains too?
It’s a good time to be holding Apple. In my case since the year 2000.
If you read one thing today, I urge you to read “The Coffee Can Portfolio” from The Motley Fool (http://newsletters.fool.com/18/coverage/updates/2014/06/06/the-coffee-can-portfolio.aspx?source=isesitlnk0000001&mrr=1.00).
It tells the story of an investment manager who studied the history of a man’s stock portfolio over a lifetime. Instead of selling stocks when they seemed to hit highs, the man did the opposite – he simply put the stock certificates away and forgot about them – deliberately.
The result: the man’s portfolio realized dramatically better results than an actively managed collection of stocks frequently bought and sold.
My point is this: don’t worry about the stock split or today’s Apple stock valuation. If you are truly an investor, don’t worry about the day-to-day stock price. Let Apple do what it does best: generate a mountain of cash from being a well run company. Go outside and enjoy the summer, and many summers to come. Twenty, 30 years from now, you will be rewarded for your patience.
Think of this: a share of Apple stock has appreciated over 2,700% from its IPO over 33 years. If you had not worried about the company’s ups-and-downs, the daily hysteria reported on this website and more, and let the fruit of the tree, in this case, your investment in Apple slowly ripen over time, you are well served. And I pray you are reinvesting your dividends, because doing so compounds the number of shares you will own. And over time, that, plus the appreciation of Apple stock, can make you a fortune.
I don’t view the stock split as a big deal. Nor should you. Being patient with your investments, reinvesting dividends and letting great companies grow over time is what will make you a successful investor.
Yes, it IS that simple. Let the apples grow and ripen on your tree. You can’t yell at them to grow faster, despite the foolishness from pundits to expect that a tree will listen to their screaming. Many seasons from now, you will be thankful for your patience.