“Apple completed its 7-for-1 stock split over the weekend, and Apple stock began trading at its new split-adjusted price on Monday,” Adam Levine-Weinberg writes for The Motley Fool. “Investors cheered this change, as the stock promptly rallied 1.6% on a relatively flat day for the rest of Wall Street, reaching a new (split-adjusted) 52-week high in the process.”
“While nothing has changed from the perspective of Apple’s business, many investors appear to find Apple stock more appealing at its new price for psychological reasons,” Levine-Weinberg writes. “Pundits have claimed that it will be easier for Apple to return to its all-time high (previously around $705; now a tad above $100) now that the stock seems more affordable to retail investors.”
“However, Apple’s fate ultimately depends on its ability to grow earnings — not the accounting gimmick of a stock split. Fortunately for Apple stock owners, the company has a few significant growth drivers coming in the next 2 years,” Levine-Weinberg writes. “This should keep Apple’s earnings moving higher — sending the share price well beyond $100 to new all-time highs.”
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