AAPL stock splits 7-to-1, opens trading at $92



Do not adjust your sets: Despite finishing Friday at $645, Apple stock will open today at around $92. This is the result of a 7-to-1 stock split, which will see the price of the stock divided by seven and shareholders of record awarded six additional shares on top of their existing holdings.

Apple announced the split earlier this year in what we referred to at the time as an “earth-shattering earnings call.”

Apple’s stock has split on three previous occasions, with 2-for-1 splits taking place in 1987, 2000 and 2005. While Apple claims its aim is to make the stock “more accessible” to a wider range of customers, it’s also possible that Apple is shooting for inclusion in the Dow Jones Industrial Average index, which is price-weighted.

Whereas Apple’s previous stock price of close to $700 would have resulted in a significant reweighting of the index, a price of $92 would place it in the right range for inclusion. This would allow Apple, the world’s most valuable publicly traded company, to join the likes of AT&T, Cisco, IBM, Intel, Microsoft and Verizon on the index.

With Apple having gone public December 12, 1980, for $22 per share, accounting for all stock splits in the company’s history this would give a rough return of 23,400 percent over 33.5 years.

Apple’s all-time high stock price was $705, reached in September 2012. That would translate to $100.72, post-split.

Source: Bloomberg TV

  • AAPL_@_$101_Is_A_Done_Deal_:)

    The talking heads said there would be no post-split investors jumping in to buy Apple stock and it seems they were spot on. Interest in buying Apple seemed to wane a couple of days before the split was going to happen. In actuality, nothing has changed with Apple except the number of shares. Without new products, Apple’s share price will be dead in the water. The psychological effect of the split didn’t happen at all. Some Apple shareholders were hoping for a post-split rally but that doesn’t make much sense. Apparently, everyone who wanted to buy Apple shares already did well before the split. They probably sensed Apple was overbought and nothing more could be gained. The one thing to look for is Apple’s inclusion into the Dow. That might help boost the shares a bit.

  • Steve Griffiths

    Not sure that’s true… For the first time I’ve been able to start buying AAPL shares – until now they’ve been out of my price range. You might not see a sudden burst of big share deals, but that wasn’t what Tim said he wanted. His plan was to let more small share holders have a chance (which this one has done!)

    Plus – the price has crept up by $1.25 over the day – that’s equivalent to nearly $9 of pre-split gain.

    Looking at the updated (to include the split) price history on my trading site – most days closing is within $1 of the day before, some days it’s only a few cents difference. So maybe there’s been more effect that you think…

  • Ian Docherty

    Wouldn’t buying 1/7th as many at the old price give on the same benefit?

    • Tim Shaffer

      Yes it would. Apple shares would only be “out of my price range” if you were going to buy less than about $645 worth (price before the split) which doesn’t make a whole lot of sense.

      • Daryl Fortney

        for many people that may like to invest that represents an entire paycheck, now it is within reach. not sure how this ‘doesn’t make a whole lot of sense’ to you. it is pretty simple to consider really.

      • Tim Shaffer

        Let’s say you want to buy Apple stock with a small budget. The current price is $94.25. You can buy 7 shares for a total of $659.75 Let’s assume commission of $7 so buying shares actually costs $666.75. When you go to sell the stock, you’re going to have to pay that $7 commission again. So there’s a total of $14 in commission. That means in order to break even when you sell, the stock would need to increase $2 per share ($14/7 shares you own).

        Let’s assume the stock hits $100 per share and then you sell. You can sell for $700. Subtract the purchase price ($659.75) and subtract your commission ($14). Congrats, you just made $26 and paid $14 in fees.

        There’s also the risk that the stock price will drop, as Apple stock has before. It was a split-adjusted $100 per share in Sep 2012 and dropped to $56 per share in April 2013 and June 2013. Don’t invest what you aren’t willing to lose. Investing an entire paycheck in one stock is a bit risky if that’s all you can afford.

      • Daryl Fortney

        so you are suggesting people should not invest if their per trade commission is 1-5% of the value of the trade so that they may avoid gaining the other 300% that the shares have risen in the past few years? Of course the government takes another 15% or more. Yeah, probably better to just buy more cigarettes and forget it. You have to start somewhere and high risk often times grants high reward.