Apple announces seven way stock split

There was a lot to digest in yesterday’s earnings conference call. One item that was mentioned, almost as an afterthought, was Tim Cook’s announcement of a seven way stock split.

From Seeking Alpha (free reg-wall):

In addition to the changes to our capital return program today. We are also announcing a seven-for-one split of Apple common stock which will occur in June of this year. We are taking this action to make Apple stock more accessible to a larger number of investors. Each shareholder of record at the close of business on June the 2nd, 2014 will receive six additional shares for every outstanding share held on the record day and trading will begin on a split-adjusted basis on June the 9th, 2014.

This means that the if you own a single share priced at $525, say, before the split, on June 9th you’ll find yourself with seven shares, each worth $75.

Tim Cook made the point that the split was done to make shares more accessible to a larger number of investors. All the newly split shares will be the same class, unlike the recent 2 for 1 split of Google’s stock, which split the stock into two different classes, one with voting rights and one without.

  • Gerard J

    To the investor this action means nothing. Your account value is unchanged by this. The lower price per share may attract some new investors but that will be a marginal effect. If Gruber’s link today to VOX is correct and, as Yglesias posits, this is move to get Apple’s tock in the DJIA then there could be a move upward of AAPL once all the index based mutual funds are then required to purchase the stock. This is a common effect of companies being put in to major indexes. It may also be a large part of why AAPL actually went UP this morning after earnings reports instead of down as it tends to do. Time shall tell. (statements are speculative and not based on any sound financial training or experience. past performance is no indication of future performance and all that legal mumbo jumbo… this is just me spit-wadding an idea).

    • I am trying to find answers about this, but how does the 7:1 split impact the dividend payouts?

      • Dips

        It doesn’t. You’ll still get the same. 2% of the new stock price or whatever it is.

    • Dips

      It went up because they beat analyst estimates!

      • Gerard J

        They do that a lot and still go down. There was something else that made Apple go UP on an earnings report.