“One of the arguments made for the cause of the increase in Apple’s share price of late has been that dividends would attract more institutional investors and provide more liquidity to Apple’s shares,” Dirk Schmidt reports for Asymco. “Can we test this argument?”
“The decision to start paying dividends was made three weeks ago. It makes sense to assume that this new information has been absorbed by the markets and market participants have adjusted their positions,” Schmidt reports. “Funds that were previously restricted in their investment in Apple due to its lack of dividend policy, could now go ahead.”
Schmidt reports, “However… the share price climbed continuously before and after the dividend declaration of March 19th (shown in red). Trading patterns did not show unusual highs or lows.”
Read more in the full article here.
It is nonsense to think someone is going to buy a 600+ stock for a $9 a year dividend. Apple should have done something better like buy or build it own bank or cell network. Stockholders would have profited far more than $9 a year
An odd comment. In what way are these alternatives comparable? A dividend of $10.60 a year costs Apple, presumably, $10.60 a year. Is this the cost of a bank? A cell network? Is it any more of less likely now that they will do one of these things?
On the other hand, some of us, needing our investments to live on, might find AAPL the perfect way to maintain fabulous long-term growth, without having to sell stock each year just to eat. How messy!
It’s not nonsense at all. You’re making money every quarter, PLUS can potentially get another gain when you sell the stock. (Yes, you could lose too, but that and the gain potential are true with any stock.)
So you’re earning money WHILE you own the stock, and can gain more on the stock’s appreciation.
Remember the $10 + dividend is just for starters …… There could be a special dividend or raise existing ….
The fact they are paying after so many years of no dividend is a step in the right direction ….. Even if it is only in the 1 1/5 percent range …. That is better than a bank and probably safer too!
And yes, I suspect a few more shares were purchased by certain mutual funds and individuals ….. As well as gave some a reason not to sell …..
So yes it had an upward effect on the stock price ….. For sure it wasn’t a negative effect!
… you’d have to be pretty weak-minded to let a $9 a year dividend influence your purchase of a stock. Oh, wait, we’re talking about gamblers here. Yeah … the mere fact that AAPL is in the news could influence them.
There are quite a few Mutual Funds yearning to buy AAPL, but unable to because AAPL has not paid a dividend. They set their rules this past millennium and can’t easily change them simply for a (great) chance to make a profit. With the dividend about to be issued, that limit is about to go away.
Still … there are few enough fools with little enough remaining cash able to bid up the price based on a tiny premium. Even the previously-denied funds will seek a bargain price. Like … $700?
That little dividend is a lot more than I got from owning Apple shares since 2004 on top of the awesome growth I got from having Apple’s stock rise in that time. I have no complaints because I’ve come out quite a bit ahead. I’m hoping that the institutions that require dividends before purchasing Apple stock will push the stock up even higher. To me, it seems like a win-win situation.
Sure, I hope Apple can also start a bank (a positively great idea) or a private cellphone network (just so-so), but I suppose I shouldn’t be too greedy because then I will never be satisfied with Apple. Hey, I could have been stuck owning Nokia or RIM all these years and have next to nothing to show for it. Maybe Apple isn’t the most perfect stock in the world, but I could have done a lot worse.
No, what you got since 2004 was tremendous value increase in your stock because Apple had the money to do what it needed to do.
Correct, and they still do.
The dividend will put an end to the manipulation of the stock. You can see signs of it already.Since the dividend was announced Apple has had a few significant down days which in the past would have turned into extended selloffs. It seems the stock is being bought up much faster and on much smaller dips now.