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

[MacRumors]

Hedge fund manager Doug Kass tweeted (via 9to5Mac) a short time ago that he is hearing rumors of an announcement regarding a stock split coming at Apple's shareholder meeting scheduled for tomorrow at the company's headquarters in Cupertino, California. The stock has reversed course since Kass's Tweet, moving from down $5 to up $5.

Many observers, such as Fortune's Philip Elmer-Dewitt, are calling into question Kass's statements, noting the sequence of events that saw him announce a large position in Apple, float the rumor of a stock split, and then announce that he was selling off shares after the stock spiked. Kass has, however, defended his Tweet, saying that the rumors were "all over the Street".

While a stock split would not add any intrinsic value to Apple's market value, some have viewed a potential split as a positive for Apple under the perception that a company is more likely to split when it is confident that the stock price will rise in the future. Observers have also argued that high stock prices for companies like Apple and Google have kept them from being added to the Dow Jones Industrial Average given the outsized impact they would have on the price-weighted index.

Apple's last stock split came in February 2005, a 2-for-1 move that brought the price of a single share down to just under $45. Apple has refrained from splitting its stock since that time, with investors seeing the share price rise to over $700 before pulling back to the current level around $450.

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

[Peace]

If they split it I'm buying it.

[d0mth0ma5]

How is that not stock price manipulation?

[TheGreenBastard]

I want a piece of the apple.

[ThatsMeRight]

Originally Posted by d0mth0ma5

How is that not stock price manipulation?

I have found that this is a good explanation about a stock split. It's quite interesting.

[Ralf The Dog]

Many investors only invest in units of 100. Apple's high price locks many investors out. If Apple's stock price is halved, I can see many small investors jumping in. Many less sophisticated investors who do not look at the P/E or PEG but only look at Apple's price will stop thinking it is overvalued.

Volatility should go up, as small investors are more likely to buy and sell over purchasing and holding for years.

[725032]

Ive said it before and i'll say it again.

Buy 100+ or dont bother at all.

So glad i sold out when i did.

Stock splits always bring the wrong kind of investors in to the mix.

[basesloaded190]

Originally Posted by ThatsMeRight

I have found that this is a good explanation about a stock split. It's quite interesting.

That's not what he means. This guy claiming a split is happening could be just trying to get the price to shoot up and sell quick to make a lot of money.

[deadwalrus]

Originally Posted by Peace

If they split it I'm buying it.

In that case I'll sell you 4 quarters for a dollar. All day long. LET'S DO THIS.

[DipDog3]

1. Buy a lot of AAPL shares at a low price.
2. Tweet about a stock split rumor.
3. AAPL's price goes up.
4. Sell shares & PROFIT!!!!

Why didn't I think of that???

[d0mth0ma5]

Originally Posted by ThatsMeRight

I have found that this is a good explanation about a stock split. It's quite interesting.

I was referring to Kass rather than Apple.

[Peace]

Originally Posted by deadwalrus

In that case I'll sell you 4 quarters for a dollar. All day long. LET'S DO THIS.

Some people can't afford $450-$700 a share as an investment.

$200-$300 is more reachable for those wanting to invest and don't have a lot of money.

The last I heard Apple was a publicly traded company.

[mrhick01]

Originally Posted by ThatsMeRight

I have found that this is a good explanation about a stock split. It's quite interesting.

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.

[basesloaded190]

Originally Posted by Peace

Some people can't afford $450-$700 a share as an investment.

$200-$300 is more reachable for those wanting to invest and don't have a lot of money.

The last I heard Apple was a publicly traded company.

Not sure why/what you quoted me for

[lunaoso]

Originally Posted by deadwalrus

In that case I'll sell you 4 quarters for a dollar. All day long. LET'S DO THIS.

He would have to buy the stocks now for that analogy to make sense. If he buys them after the split, he gets them at a cheaper price.

[Peace]

Originally Posted by basesloaded190

Not sure why/what you quoted me for

A mistake. sorry.

[mrhick01]

Originally Posted by Peace

Some people can't afford $450-$700 a share as an investment.

$200-$300 is more reachable for those wanting to invest and don't have a lot of money.

The last I heard Apple was a publicly traded company.

To your first sentence, I thought that is what investment clubs and mutual funds are for, to help those without the capital to do it themselves have an opportunity to invest in higher-priced stocks that have growth potential.

[Brian Y]

Erm... +$7 isn't really a "jump". Unless you measure using limp kangaroos.

[Squilly]

I'm almost all for the idea, except for the fact that it'll take longer to hit $1000, which everyone wants.

[Ralf The Dog]

Originally Posted by d0mth0ma5

How is that not stock price manipulation?

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.

[samcraig]

Originally Posted by Brian Y

Erm... +$7 isn't really a "jump". Unless you measure using limp kangaroos.

In addition - the market is up today. And Apple has easily had quick downturns and upturns in any given day.

[Peace]

Originally Posted by mrhick01

To your first sentence, I thought that is what investment clubs and mutual funds are for, to help those without the capital to do it themselves have an opportunity to invest in higher-priced stocks that have growth potential.

That's probably true for most people but I like to control where my money goes without using a middleman.

[basesloaded190]

Originally Posted by mrhick01

To your first sentence, I thought that is what investment clubs and mutual funds are for, to help those without the capital to do it themselves have an opportunity to invest in higher-priced stocks that have growth potential.

You will never get the same return with a mutual fund that might hold a few shares of a stock compared to completely owning shares

----------

Originally Posted by Ralf The Dog

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.

But Apples hasn't said anything about this. Right now it is just some guy telling everyone what he thinks. That's the whole point!

[theOtherGeoff]

Originally Posted by DipDog3

1. Buy a lot of AAPL shares at a low price.
2. Tweet about a stock split rumor.
3. AAPL's price goes up.
4. Sell shares & PROFIT!!!!

Why didn't I think of that???

Because
a)you (or your trading floor friend) don't have a lower (near zero cost) cost of trade

b)you don't feel the need to sell your inhouse pile of apple stock you thought you'd be moving in 30-60 days a month ago when the price cratered and you bought.

c) you don't have 100s of thousands clients who will pay up to $30/trade for 20-200 shares of 'the action'

d)these same clients will sell in a few weeks months if apple doesn't move.

e) therefore you had no need to drive a couple million in easy profits into your plus column before quarterly bonuses are locked in.

[m2nal]

ha!

Douglas Kass ‏@DougKass
Apple continues to climb - now up by over $8. I continue to pare back as the rumor seems to be baseless based on current share authorization