“Of course, the stock has since climbed past $320 quite on its own. It closed Tuesday at a record $355.20, up 0.94% for the day and more than 690% since the last split,” P.E.D. reports. “With the six-year anniversary of that Feb. 28 event approaching and talk of a stock split once again in the air, let’s examine the pros and cons.”
Full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
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The article quoted Berkshire on stock prices and they pointed out that sensible investors won’t worry about a stock being at a high dollar value. Fickle investors will and therefore it is better for Apple to disuaded them by not splitting.
Splitting could add even more volatility by increasing the proportion of investors who are easily panicked by non-sensible market news.
I want Berkshire Hathaway levels!
@ Zeke
Zeke is right. 10:1 would make the stock a lot more viable for a lot more retail investors – especially beginners. The reason is one that nobody has addressed yet – specifically selling covered calls on shares owned for extra cash or to lock in some profits in a downturn. Options are traded in 100 share lots. One hundred shares of AAPL are currently $35K++ just to be able to sell one covered call contract. At 10:1 (i.e. at $35/share) those 100 shares lots are only $3500 each. Generally much more affordable for beginners.
Apple is about to sell 10 to 15 million phones on Verizon this year and 20 million Ipads this year also, a split early this year ahead of all the good news means more money in your pocket between now and 2013. Oh, and Apple is going to make a strong run to 20 percent of the overall PC market too, you want a split early most people in the PC world still don’t know what is going hit them in the next 3 to 5 years and that includes most of the so called tech people. You want a split early.
@Zeke,
If people are saying Apple is too expensive to buy then they are too ignorant to put their money in the stock market to begin with.
@Zeke,
And the Yogi Berra quote about Apple’s stock, and splits, is dead right on the money. If you don’t understand why, don’t lash out with name calling and resistance.
Apple shares would be more stable when ordinary people are tempted to buy it’s shares. Ordinary people tend to buy and hold which provides more stability. The hedge funds and large investment group could not care less since they can buy and sell no matter what the numbers and they often do to manipulate the market.
Yes, I understand people should learn to review the fundamentals but since they do not then why resist it.
A split does not change the value of the company and costs nothing but it makes it more attractive. Share buy backs simply takes cash from the bank and gives it back to the remaining shareholders, Giving dividends is similar but has the benefit of attracting fixed income investors and it is unusual for a tech company that continues o climb higher.
Please split.
I’m fine either way. It will give AAPL some extra media attention for a few days, and the dumb investors (who think AAPL is “too expensive” just because the stock price is $360) may buy a hundred shares at $90. They won’t buy 25 shares at $360, but 100 shares at $90 is OK…? So maybe Apple should just do it. Increased “volatility” is not a bad thing. It lets investors sell at potentially higher prices and buy back at potentially lower prices. And for long-term investors who buy and hold “forever,” volatility is irrelevant (it just makes the “ride” a bit more interesting).
@Too high for Ordinary People
There’s nothing stopping an average investor from buying shares right now. If someone has $2000 to invest, then they should buy $2000 worth of AAPL. It’s irrelevant whether the price is 330 or 165 or 110, they will still have $2000 worth of AAPL regardless of the number of shares that amount allows them to buy.
In the past, before internet investing, you typically would have to buy stock from a broker in lots of 100. At that time, yes it made more sense to split a stock to make it more affordable to buy for people with less money. There’s no requirement to buy in round lots of 100, you can buy as many or few shares as you want and the commission is typically the same.
So, back to my prior point. Having $2000 worth of AAPL is $2000 worth regardless of the price per share. You gauge its effectiveness on percentage gained, not absolute dollar value gains.
This guy spits this same article out about once a month. Hey. He gets paid by the word, not by the thought.
Is it time for people to stop asking about Apple stock slits?
how can higher price imply less volatility and then the same people turn around and say price has no impact today since you can buy partial shares. it would seem that you can sell partial shares too. if it all boils down to a percentage, as some people say, then a higher or lower price should have no effect on volatility. there must be something else going on here as to why companies split their stock.
Banana Splits are better
Current conversation on 10-1 split going on here: http://programtotrade.blogspot.com