Apple shares could jump by more than a third in the next year, following next week’s 4-to-1 stock split, an analyst for social trading brokerage company eToro claims.
Alongside Tesla, which will undergo a 5-to-1 stock split on the same day, Adam Vettese suggests Apple’s stock split “could act as a tailwind” for the value of its shares.
Vettese is basing his hot-take on analysis of 60 years of data, covering 10 “mega brands.” Even just focusing on Apple’s own performance, however, the signs look pretty good. Apple shares have split four times before. In June 1987, there was a 2-for-1 split. After this, Apple shares split 2-for-1 again in June 2000. There was yet another 2-for-1 split in February 2005. The most recent split took place in June 2014. This was a 7-for-1 split, the first in Apple history.
Apple’s history of stock splits
The two most recent splits, in 2005 and 2014, saw Apple surge by 58.2 percent and 36.4 percent in the subsequent year, respectively. Given that Apple has its first 5G iPhone coming later this year, Apple Silicon, and a getting-stronger-by-the-minute services offering, a boost to the share price doesn’t seem too shocking. Apple, which recently crossed the $2 trillion market cap for the first time of any U.S. company, has added $1 trillion to its value in just the past couple of years alone.
Of course, it should be pointed out that a stock split doesn’t inherently make the stock better value. Apple’s price per share is going to plummet between Friday and Monday. But that’s because, for every one share that exists Friday, four will be issued on Monday. In other words, everyone who owns Apple stock on Friday will have four times as many shares next week — although the overall value will remain the same.
Nonetheless, some investors (read: low levels ones) jump on share splits as a time to buy because it is suddenly more affordable. A single Apple share that, right now is trading at $499.30, will soon cost just a quarter of that.
What are your Apple predictions for the next 12 months? Let us know your thoughts in the comments below.
Source: Business Insider