Apple stock split fuels investor bets on further gains

Bloomberg News reports that Apple’s scheduled 4-for-1 stock split in the wake of strong earnings and the subsequent surge in AAPL shares is fueling more bets on the company, according to TD Ameritrade Holding Corp.

Apple Park in Cupertino, California
Apple Park in Cupertino, California

Joanna Ossinger for Bloomberg News:

[Apple]s] quarterly report last week crushed Wall Street expectations amid pandemic demand for its products, and the company announced a four-for-one split for later this month to make its stock more accessible.

Activity in the world’s largest technology company “sticks out” over the past week, a repeat of the pattern seen in previous years when Apple split its stock, Christopher Brankin, chief executive officer of brokerage TD Ameritrade Asia Pte in Singapore, said in an interview Tuesday.

“It’s something that we’re seeing across our options here because of that announcement,” he said, referring to the use of derivatives to bet on more gains in Apple shares.

Apple options are pricing in more upside risk versus downside than at any time this year, despite the stock having almost doubled from its mid-March lows, Chris Murphy, derivatives strategist at Susquehanna Financial Group LLLP, wrote in a note Monday.

MacDailyNews Note: Apple’s Board of Directors has declared a cash dividend of $0.82 per share of the company’s common stock payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

Apple’s BoD has also approved a 4-for-1 stock split “to make the stock more accessible to a broader base of investors.” Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020.

1 Comment

  1. It seems as though Apple got a couple of downgrades, so not everyone is hyped-up over possible gains from the split. I personally don’t see much in the way of headwinds for Apple apart from possible problems with China that would affect many companies and maybe a second pandemic wave which would also affect many other companies along with Apple. As usual, I tend to ignore most of the analysts, both the pumpers and the doubters. What really matters is what big investors think and how much consumers purchase from Apple. I don’t know if Apple is going up a lot, but it still looks to me as though Apple stock will steadily, if slowly, rise towards the end of the year. As an investment, Apple seems a safe a bet as any tech company in these pandemic times. If Apple makes a serious production push into India, that seems like a positive move for Apple.

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