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Apple Stock Jumps on Rumors of Stock Split at Tomorrow's Shareholder Meeting

M

mrhick01

macrumors 6502
Sep 22, 2008
486
316
Ralf The Dog said:
Everything a company does manipulates the price of a stock. The question is, are the changes predatory or are they beneficial.

When a company announces a new product, it could be considered manipulation of stock price. It is also quite legal. When a company hires or fires members of the board of directors, it is quite often with the intent of improving stock prices.

When a company splits it's stock, it is usually because, their price is so high, many who wish to invest, can't. By splitting, they are lowering an artificial barrier to entry. This is generally a good thing.
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This wasn't Apple's announcement, it was a statement from a speculative analyst. Now if Apple explicitly leaked this to him, that is one thing...but it appears that in being a person of influence on Wall Street and doing something like this, and profiting from it, that he may have done something that is actionable.

Even if the "bump" is $7 a share, if you own 2,000 shares, you're talking about real money. Hell, even if you only owned 500 shares.
 
iPusch

iPusch

macrumors 6502
May 30, 2012
379
0
Manhattan, New York
How does an Apple share even look like?
Is it just a sheet of paper with the 'worth' and 'Apple Inc.' on it?
Can I put one in a frame like the 1 Million dollar note^^
Or is it virtual stuff, cloud 'n' this stuff.
 
R

Ralf The Dog

macrumors regular
May 1, 2008
192
0
mrhick01 said:
It is a useful explanation, but it does seem like stock manipulation nevertheless.

I am disturbed over what the stock market has seemed to become over the last 20 or so years. Admittedly, my knowledge is rudimentary, only having researched enough over the years to be "investment club"-level savvy. It seems like the overall increase of the market is less about the strength, fundamentals and future of corporations, but merely how they can puff up their numbers for short-term gain. It appears to operate more like a casino and less like an exchange that exists to support American corporate financial strength.
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Many companies do play destructive, short term games to inflate their value. Their actions are more about fluff and less about providing the investor with value. Stock splits are different. They make make purchasing a stock less difficult for a small investor, thus, increase the value for that investor.

Splits also make purchasing stock less granular. If a stock is $1,000 a share, and you want to purchase $500 dollars worth of the stock, it is quite hard. If you want to buy, you must get twice as much as you want. If the stock is worth $10, you can purchase the exact amount you need.

Splits increase value by adding convenience to the investor.

basesloaded190 said:
Not sure why/what you quoted me for :confused:
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Avatar74

Avatar74

macrumors 68000
Feb 5, 2007
1,608
402
Peace said:
Some people can't afford $450-$700 a share as an investment.
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What does that mean, exactly?

Are they not able to buy half the shares at 500 that they would buy at 250 and encounter basically the same result? Does mathematics and physics work differently on their planet?

-or-

Do they not have so much as $500 to their name, in which case they probably shouldn't be trading securities at all.

Proper portfolio allocation and sector diversification isn't really achieved if you have less than $100,000 in funds to invest. If you are in that situation, you're better off participating in an index fund and sitting on it, not just because of risk mitigation (fractionalizing your investment across hundreds of stocks to reduce risk exposure), but also because index fund managers have almost no expense and most indexes tend to consistently outperform the handful of securities that amateurs might be likely to pick. Why play with individual securities if you can sit on an index fund and earn a better return over time?

You're not better off if Apple decides to dilute its per share value because that has no effect on the earnings results of the company.... Buying 20 shares of Apple at $250 is of no additional benefit to you than buying 10 shares of Apple at $500...
 
spazzcat

spazzcat

macrumors 68040
Jun 29, 2007
3,662
4,757
iPusch said:
How does an Apple share even look like?
Is it just a sheet of paper with the 'worth' and 'Apple Inc.' on it?
Can I put one in a frame like the 1 Million dollar note^^
Or is it virtual stuff, cloud 'n' this stuff.
Click to expand...

In theory there are stocks on paper somewhere, but you almost never seem them. They are held by your broker, you maybe able to request them? But it would be a pain to sell because you would need stocks to be with your broker...
 
I

I.Love.Apple

macrumors regular
Mar 13, 2012
127
0
Peace said:
That drop is seasonal and could also be related to the new size iPad.
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There might be some of this but 90% drops obviously can't be explained by seasonal factors. The original source actually explains the reasons: "The sources said the drop is largely due to the growing popularity of the iPad mini as well as to increasing demand for low-priced tablets."
 
Chupa Chupa

Chupa Chupa

macrumors G5
Jul 16, 2002
14,835
7,396
Splits are for suckers. I don't believe it will happen because it's not the instant cash bonanza Greenlight and the other institutional investors are looking for.

For all you who are looking to jump in if Apple splits -- why? If I take a slice of pie and cut it in half it's still the same amount of pie. So if you are that bent on buying Apple now, then do it. $1000 worth of Apple is $1000 worth of Apple. Why get caught up on how many shares you have (yes, dividend is adjusted too). If Apple announced a reverse split would you then short the stock because that is your logic.
 
Avatar74

Avatar74

macrumors 68000
Feb 5, 2007
1,608
402
Chupa Chupa said:
Splits are for suckers.
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Precisely. Scarcity increases value... Berkshire-Hathaway has not had a single stock split of their Common Class A shares since 1964... Current price? $148,362 per share. I like it that way. It keeps out the scatterbrained speculators who panic on every little tea leaf they read too much into.

Say it with me: speculation is not investing.
 
R

Ralf The Dog

macrumors regular
May 1, 2008
192
0
Chupa Chupa said:
Splits are for suckers. I don't believe it will happen because it's not the instant cash bonanza Greenlight and the other institutional investors are looking for.

For all you who are looking to jump in if Apple splits -- why? If I take a slice of pie and cut it in half it's still the same amount of pie. So if you are that bent on buying Apple now, then do it. $1000 worth of Apple is $1000 worth of Apple. Why get caught up on how many shares you have (yes, dividend is adjusted too). If Apple announced a reverse split would you then short the stock because that is your logic.
Click to expand...

It is because, many investors are priced out of the market at current levels. There are quite a few M&P investors that would love to own 100 shares of Apple, however, they can't afford to purchase them without overweighting themselves on one stock.
 
I

I.Love.Apple

macrumors regular
Mar 13, 2012
127
0
UnfetteredMind said:
Recall what Tim said about trying to figure out Apple's plans from parts supply rumors, etc.
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Why should we? I remember well that he said this when the rumors about cuts in orders from Apple suppliers started spreading. Since then, AAPL is down more than $200 and iPhone and iPad sales indeed were less than expected. I might stick with the rumors. Especially ones from Digitimes which is based in Taiwan - the main source of components for many computer companies.
 
R

Ralf The Dog

macrumors regular
May 1, 2008
192
0
Avatar74 said:
Precisely. Scarcity increases value... Berkshire-Hathaway has not had a single stock split of their Common Class A shares since 1964... Current price? $148,362 per share. I like it that way. It keeps out the scatterbrained speculators who panic on every little tea leaf they read too much into.

Say it with me: speculation is not investing.
Click to expand...

It would be moronic for most investors to purchase 100 shares at $148,32. If I were to do so, I would be very overweight on one stock. Any investor with that little diversification is not very bright.
 
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