“I’ve been getting a few excited emails about the possibility of a stock split at Apple,” Cody Willard writes for TheStreet,com RealMoney. “I have two words for you: ‘Who cares?!’ So what if Apple doubles the numbers of shares outstanding and halves the stock price? What good does that do anybody except the bankers, accountants and lawyers who get paid fat fees for pretending to do the hard math involved and making sure the right papers get filed at the right agencies?
Willard writes, “Stock splits might have made some sense back in the early 1900s when the value of a dollar was 90% less than it is today, which would have made a $200 stock equivalent to several-thousand-dollar stock. And back then a higher share count might actually have impacted the ability to trade a stock. But why on God’s green Earth should Apple split? Does the stock seem illiquid to you? NO! Does a $100-per-share price keep small investors out? NO!”
Full article (paid subscription required) here.
The basic rationale for splitting is that it makes individual shares more affordable and therefore attracts more investors. For a shareholder today, 2-for-1 split simply means that for every $99 share they own pre-split, they would have two $49.500 shares post-split; a 3-for-1 split would result in three $33 shares. There is no monetary loss or gain in a stock split. In our opinion, a share price around $100 actually does keep small investors out of the game. In Apple Inc.’s case, how do you think a 2-for-1, or even 3-for-1, split would impact shareholders and/or affect volatility (which is one thing Apple sure doesn’t lack historically)?
Apple stock split history:
(Date Declared – Record or Split Date – Payable Date (date NASDAQ trading began on split-adjusted basis): Type)
Feb. 11, 2005 – Feb. 18, 2005 – Feb. 28, 2005: 2-for-1 Stock Split
Apr. 19, 2000 – May. 19, 2000 – Jun. 20, 2000: 2-for-1 Stock Split
Apr. 22, 1987 – May. 15, 1987 – Jun. 15, 1987: 2-for-1 Stock Split
source: Apple Inc.