Apple announces 7-for-1 Stock Split
Apple announced another stock split that will occur on June 2nd 2014, and begin trading at the lower split adjusted price on June 9th. This one is a little different than before. Not in any financial way, just that this time it will be a 7-for-1 split. This will not have any direct impact on the company’s financials, it will simply dilute the shares and ownership percentages while making it easier monetarily for the average investor to purchase a share of the stock. At the closing price of $594.09 as of 4/28/14 it would be a little more difficult for the average investor to purchase that one share of Apple Inc. However, after the stock split, one share would then only cost $84.87. The number of authorized Apple common shares will increase from 1.8 billion to 12.6 billion as a result of the split. The major difference is that one share gets one voting right, but now that same share would still get the same one voting right, just there would be seven times the shares out in the market, so your percentage of company ownership which each share of stock entitles you to have is minimized proportionally.
On the Apple Investor Relations page website when asked “Why have you decided to split Apple’s stock?” The reply was “We want Apple stock to be more accessible to a larger number of investors.” This will be Apple’s fourth stock split since going public. Apple’s common stock split on a 2-for-1 basis on May 15, 1987, on June 21, 2000 and also on February 18, 2005.
How this affects the investor. If you ever wanted to buy a share of Apple stock, but had the mindset that it was too expensive for you to afford, now that will change. You will be able to buy a share at 1/7th of the current price, so getting a share at under $100 will be very possible and likely as of June 9th 2014. You should consult with your financial adviser before jumping into any stock, but if you always wanted shares in Apple, but the price was always too high, this will be your chance to jump in.