Apple’s board of directors has approved a four-to-one stock split, the company said Thursday. AAPL stock, which closed Thursday at $384.76, should go for around $100 a share when the split occurs in late August.
The news, revealed in Apple’s blowout Q3 2020 earnings report, means investors with one share at close of business on Aug. 24 will be given three additional shares trading at one-fourth the price. It’s basically a psychological move that makes Apple stock seem more affordable.
The company says the goal is to make the stock more accessible to a broader base of investors. AAPL shares closed Thursday at about $384. After this split, they’ll be worth $96, but there’ll soon be four times as many of them.
Apple pulled a similar move in 2014, splitting its stock 7-to-1. At the time, AAPL traded at around $645. The split dropped the price to a much more reasonable-sounding $92 per share. This year’s 4-to-1 move will be Apple’s fifth stock split so far.
Apple 4-to-1 stock split in August
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, Apple said.
In Apple’s Q3 2020 earnings report, the company once again reported record quarterly revenues. Somehow, Cupertino shrugged off the effects of the COVID-19 pandemic, which crushed the U.S. economy as businesses across the country shut down. The company set a June quarter record, with quarterly revenue of $59.7 billion. Rising revenue from product sales and services drove the 11% increase over last year’s results.
In fact, people forced to work from home during the public health crisis probably gave Apple a boost, Apple CEO Tim Cook said during Thursday’s earnings call. Shelter-in-place orders likely drove strong sales of Macs and iPads. Plus, the updated, relatively inexpensive iPhone SE also proved a hit with consumers as the pandemic spread around the world.
“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” Cook said in a statement. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation.”
AAPL shares soared in after-hours trading following the surprisingly strong earnings report.
Ed Hardy contributed to this report.