Apple’s stock has split five times since the company went public. The stock split on a 4-for-1 basis on August 28, 2020, a 7-for-1 basis on June 9, 2014, and split on a 2-for-1 basis on February 28, 2005, June 21, 2000, and June 16, 1987.
In each of the five times that Apple has split its stock, it was undergoing strong growth in sales and profitability, save for the split in the year 2000, when sales dipped between the dot-com bust and the release of the iPod in October 2001.
Currently, there is no news or indications that Apple will split its stock. It has been nearly four years since Apple’s last stock split. In the last two splits, the company appears to have intended to bring the share price down to about $100. With a current price in the upper $150s, below the 52-week high of $179.61, a split along previous lines does not seem imminent.
Companies issue stock splits for a variety of reasons, but the primary motivation is typically to make their shares more accessible to a wider range of investors. Stock splits increase the number of shares outstanding and reduce the price per share, which makes the stock more affordable for smaller investors.
While fractional share purchases are widely available today, they were not always an option. In the past, investors had to buy whole shares, which meant that high-priced stocks were out of reach for many people. Stock splits were a way for companies to lower the price per share and make their stock more accessible to a broader range of investors.
In addition to making their shares more affordable, companies may also issue stock splits to increase liquidity in their stock. By increasing the number of shares outstanding, the trading volume in the stock can increase, which can make it easier for investors to buy and sell shares.
Finally, stock splits can also be a signal to the market that a company is doing well. When a company announces a stock split, it can be interpreted as a positive sign that the company’s management is confident about the future prospects of the business.
MacDailyNews Note: So, while fractional share purchases are now widely available, companies still issue stock splits to make their shares more accessible to smaller investors, increase liquidity, and, importantly, signal confidence in the future of the business.
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Missing in this piece of information is that Apple is part of the major stock market indexes like S&P 500, Dow Jones that are often considered the primary benchmark for U.S. equities, and many mutual funds and ETFs are available that track these indexes. And because the way are constructed the larger a company is, the greater weight it will represent in them. So every time the Apple stock price reaches a level of $400 each share, that means each percentage of variation in a stock price has a huge impact in these indexes. And that means in a day that the market would be lousy but Apple stock is up – or vice versa…- the index would go up and down much more by Apple weighting….It definitely will be a “corrupted and distorted “ measure of such important indexes.
Hence the market “pressure” for once in a while Apple makes these splits. And that’s IMHO is the “main” reason for Apple stock split nowadays….