Apple’s Stock Split

Apple Inc. has been leading the world of technology and the smartphones world since its inception. It also has changed the perception of the smartphones by including many innovative features which others try to follow as well. The company is generating huge revenues and there is no decline in stock prices, recently, as well. Investors are satisfied with the market position of the company. In order to make it more feasible for the investors, Apple decided to stock split for the first time in nine years. This particular step supported and boosted the company’s status as soon as it was decided.

The news about Apple’s stock split were declared in April which resulted in a 25% increase in Apple stock valued at more than $100 billion in investor’s wealth. An increase was also measured in the company’s quarterly dividends. The repurchases made by the company amounted $30 billion.

Attracting more investors and shareholders

The reasons for attracting more investors seem to be more psychological than logical. The primary function of a split is to low down the stock's trade price to a great extent by increasing on the amount of the withheld shares. Investors are more excited with the lower price per share as they previously avoided buying Apple stocks because they were expensive. Apple introduced a 7 for 1 stock split which will let every stockholder have an additional six shares for every single share they buy. Hence, the stock split has proved to be fruitful to Apple where investors are more interested in spending in the organization.

Fourth Apple stock split

Apple has previously accomplished the 2 for 1 split in 1987, 2000, and 2005. The results were very positive and in favor of the company as the stocks climbed 2% after 1987. The stocks immensely grew by 60% after the first year of stock split in 2005. However, the decline in share occurred only in 2000 by 57% which was considered as a dark era for technology stocks.

What if Apple had never split the stocks

Since its inception, Apple has decided to split stocks for four times now. Analysts believe that if Apple had not decided to split stocks throughout their history, every investor would have owned 8 shares. Hence, the closing stock quote of the company for Friday, $645.57 would have been $5164.56 for the unadjusted splits.

Conclusion

Apple has been driving its sales as well as revenues excessively in the market and maintains a very good record as well. In order to issue more shares and make the investors feel valued and content, the company decided to split its stock which has been successful in the past two occasions as well.

Keep visiting our blog for detail discussion on Blackberry Ltd.