Apple Reports Record March Quarter Results, Splits Stock 7-for-1, and Boosts Share Buyback

[IJ Reilly]

TC's reasoning was that at a split price, more investors could afford to buy apple. If I were a low_end investor that invested 10K per annum (as an example) and wanted to diversify my portfolio, apple's stock @ 500-600 price point meant that I had to be careful with my investment. It was the same with google..buy 10 shares of google or buy many more spread out (diversify)..If i wanted to put down a 1000$ on a monday morning i had to choose between google and apple..With the new split, i can buy one share of google and say 6 or 7 of apple..

Nobody is forcing anyone to buy shares in round numbers. If it made sense to buy ten shares of AAPL before, then it makes sense to buy 70 in June -- the value of the investment being exactly the same both ways. The same is true for any other number you might care to mention.

 

[vomhorizon]

Nobody is forcing anyone to buy shares in round numbers. If it made sense to buy ten shares of AAPL before, then it makes sense to buy 70 in June -- the value of the investment being exactly the same both ways.

I know, but can one buy half a share of apple?

 

[IJ Reilly]

I know, but can one buy half a share of apple?

If that's your threshold, sure. But if it was, please do yourself a favor and buy an ETF, like an S&P 500 fund. You can buy fractional shares in one of them as often as you like.

 

[vomhorizon]

If that's your threshold, sure. But if it was, please do yourself a favor and buy an ETF, like an S&P 500 fund. You can buy fractional shares in one of them as often as you like.

I don't buy one share at a time, but if i recall correctly TC said that a lower share price (through a split ) opens up the stock to investors that do not have a large amount of money per investment yet still want to play around in the market on their own..

 

[mrxak]

Guys I am still confused by this 7/1 split.?? What should I do?

Lets say I have 15 shares now by June 2nd and the stock is at say $550 should I sell all my shares before the stock changes to what people are saying $75??

Or does my shares (15) increase x7? so = I will have 105 shares? and if I wanted to sell each share it would then = $75?


If someone could please help and give advice for those who already have shares what it means? should i sell before 2nd June or carry on holding?

Explain in detail please

Thanks

Sell me your 15 shares for $75 each, today, and you won't have to worry about it. Heck, I'll pay $100 each for your 15 shares. That's a good deal!

 

[RedOrchestra]

A little comparison:

Revenue - 45.6B/Q2 vs 57.6B/Q1

Net Profit - 10.2B/Q2 vs 13.3B/Q1

Net Profit per
Diluted Share - 11.62/Q2 vs 14.50/Q1

Gross Margin - 39.3%/Q2 vs 37.9%/Q1

 

[Rogifan]

Any significance to the stock split date being the same day as WWDC keynote?

----------

A little comparison:

Revenue - 45.6B/Q2 vs 57.6B/Q1

Net Profit - 10.2B/Q2 vs 13.3B/Q1

Net Profit per
Diluted Share - 11.62/Q2 vs 14.50/Q1

Gross Margin - 39.3%/Q2 vs 37.9%/Q1

Who compares quarter over quarter? Q1 is Apple's holiday quarter.

 

[vomhorizon]

Any significance to the stock split date being the same day as WWDC keynote?

----------



Who compares quarter over quarter?

RedOrchestra

 

[FluJunkie]

Who are these people? Seriously, that is not meant as a sarcastic question. It was invented in the days when adding machines were high tech. Does anyone even sell a DJIA index fund? I don't know how anyone even could, as this dumb index isn't even market cap valued. And when you consider the names represented on it, the DJIA might as well subtitled "the thirty dullest companies in the markets." Not great company for Apple, if you ask me.

You say dull, some people see "blue chip". It might seem silly to you (and me), but it feels like a prestigious club of the "Big 30", large, well established companies. Household names, the kind of safe thing you buy for your grandkids to learn about investing, etc.

This might be absurd. But it's widespread - it's probably a better known index than the S&P 500 if I had to guess. And yes, you can invest in it, SPDR I know has an ETF, and I'm sure there are others. And of course all odd-ball leveraged and short ETFs that spawn off any asset you can think of.

I don't buy one share at a time, but if i recall correctly TC said that a lower share price (through a split ) opens up the stock to investors that do not have a large amount of money per investment yet still want to play around in the market on their own..

Technically, it opens up investment to any investor with less than or equal to 6/7ths of the stock price when it splits to invest in Apple.

That might not seem like much, but it was pretty close to the amount of my first investment in Apple.

 

[FSUSem1noles]

So when should the split be showing up to be able to purchase?? at about $75 a share I'd be inclined to buy.

 

[sirozha]

I'm not too familiar with this stuff.

Does a 7-for-1 stock split means the stock will now be worth $75?.
Does it also mean dividends will be increased by 7x?

Math major? Which college?

 

[vomhorizon]

So when should the split be showing up to be able to purchase?? at about $75 a share I'd be inclined to buy.

I think after the 9th of June..

 

[FSUSem1noles]

I think after the 9th of June..

Ok, thanks! although by that time it could still be well over $100 a share after the split. lol

 

[sirozha]

Have a question.

Let's say that after the split I have 100 shares. Do I then receive 3.27 per share due to the dividend increase? Or does that get divided by 7 as well.

What do you think? Easter Bunny will bring you the dividend yield 7 times what you have now? Did you know money grows on trees?

 

[haruhiko]

Hard to say. iPhone was a big beat while iPad was a huge miss.

If Apple didn't see the iPad sale numbers slowing down they would not have made the iPad mini nearly as good as its bigger brother with all the great internals and a retina screen (although not as color accurate as the Air).

 

[hipnetic]

I own a paltry 25 shares. Bought around $300/share. Kicked myself for not selling when it hit $700 (and before the capital gains increase). But I still felt like Apple was undervalued.

Then they disappointed me by not offering me a big-screen iPhone option. Then they pretty much lost me with iOS7. I was honestly thinking about selling all of my stock sometime within the next few months. While they still seemed to be undervalued, by this point I had decided that the stock market didn't make any logical sense, and there was a lot of gaming going on behind the scenes, and since I wasn't part of that, I would probably lose out.

I was calling for a split a while back. Even though some folks said that history had shown that splits had no real effect, the pricey share price seemed to me like it would be a barrier. Then I heard that a split would require that they repatriate money here and pay a huge tax hit, so I figured it wouldn't happen anyway. So this news is a pleasant surprise (though if there really is going to be a big tax hit, then I have mixed feelings about it as an investor).

The news about upcoming larger-screen devices is grounds for optimism, too.

Too bad that iOS7 UI still sucks so bad. Otherwise, I might be thinking about buying more stock. As it is, todays news might cause me to hold on to what I've got for at least another year.

Not sure how I feel about them looking for new acquisitions, though. Not a big fan of that (especially when so many of the acquisitions usually seem to involve spending tons of money for stuff that these companies could probably do on their own if they just had some vision and hired a batch of new programmers).

As for the iPad...I've always questioned just how much market potential tablets had. We've personally bought two iPads (different generations) and a color Nook. They all pretty much collect dust these days. For me, my MacBook Air (which I've now upgraded to a 13" MacBook Pro Retina) is light enough to be real competition for the iPad when I'm looking to pick something up to surf the web, and the keyboard makes my MacBook the obvious choice. To be honest, I see tablets as being a great alternative to having TVs in the extra rooms of your house. Instead, have a couple of iPads and use them as portable TVs.

 

[GuitarDTO]

Any significance to the stock split date being the same day as WWDC keynote?

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Who compares quarter over quarter? Q1 is Apple's holiday quarter.

Interesting observation, but isn't the split adjusted basis trading not beginning until June 9? Either way, if something significant were to be announced at WWDC, this could cause a pretty quick spike in the stock after it splits. Whether logical or not, it will certainly generate hype for Apple. I'd be willing to bet that the iWatch may indeed be revealed, with a 4-5 month lead time to give developers plenty of time to prepare.

----------

I own a paltry 25 shares. Bought around $300/share. Kicked myself for not selling when it hit $700 (and before the capital gains increase). But I still felt like Apple was undervalued.

Then they disappointed me by not offering me a big-screen iPhone option. Then they pretty much lost me with iOS7. I was honestly thinking about selling all of my stock sometime within the next few months. While they still seemed to be undervalued, by this point I had decided that the stock market didn't make any logical sense, and there was a lot of gaming going on behind the scenes, and since I wasn't part of that, I would probably lose out.

I was calling for a split a while back. Even though some folks said that history had shown that splits had no real effect, the pricey share price seemed to me like it would be a barrier. Then I heard that a split would require that they repatriate money here and pay a huge tax hit, so I figured it wouldn't happen anyway. So this news is a pleasant surprise (though if there really is going to be a big tax hit, then I have mixed feelings about it as an investor).

The news about upcoming larger-screen devices is grounds for optimism, too.

Too bad that iOS7 UI still sucks so bad. Otherwise, I might be thinking about buying more stock. As it is, todays news might cause me to hold on to what I've got for at least another year.

Not sure how I feel about them looking for new acquisitions, though. Not a big fan of that (especially when so many of the acquisitions usually seem to involve spending tons of money for stuff that these companies could probably do on their own if they just had some vision and hired a batch of new programmers).

As an investor, you should put aside your own personal opinions about iOS7, and recognize that the large majority of Apple customers either don't really care either way, or actually like iOS7. Point being, regardless of your personal feelings it isn't going to impact the stock because it isn't negatively affecting iPhone sales. Make your decisions on fundamentals.

 

[mrxak]

You say dull, some people see "blue chip". It might seem silly to you (and me), but it feels like a prestigious club of the "Big 30", large, well established companies. Household names, the kind of safe thing you buy for your grandkids to learn about investing, etc.

This might be absurd. But it's widespread - it's probably a better known index than the S&P 500 if I had to guess. And yes, you can invest in it, SPDR I know has an ETF, and I'm sure there are others. And of course all odd-ball leveraged and short ETFs that spawn off any asset you can think of.

Technically, it opens up investment to any investor with less than or equal to 6/7ths of the stock price when it splits to invest in Apple.

That might not seem like much, but it was pretty close to the amount of my first investment in Apple.

People sometimes forget the psychology at play in the market. The stock split will absolutely have an effect. Not a huge effect, certainly, but if it wasn't going to have any effect, why would any company ever split a stock? I do think that the DJIA is a useless metric, but it does have a psychological effect on some investors, so I can't think of any reason why AAPL on the DIJA would hurt.

 

[hipnetic]

As an investor, you should put aside your own personal opinions about iOS7, and recognize that the large majority of Apple customers either don't really care either way, or actually like iOS7. Point being, regardless of your personal feelings it isn't going to impact the stock because it isn't negatively affecting iPhone sales. Make your decisions on fundamentals.

I agree with you 100%. I was kind of ranting there. But I also worry that there's more iOS7 hate out there than we're aware of and that could have a real effect on Apple sales as that hits people. My wife uses her iPhone 4 all of the time, but she's oblivious to the fact that she's still on iOS6. She's paid no attention to whatever notifications she may have received about an OS update being available and I've purposely held off on updating her phone because I personally thought the UI changes in iOS7 were awful and I figured she would be even more frustrated by them, since she has a lot less patience than I do (FYI, I updated my iPhone to iOS7 on day one thinking it would be great and my tech-savvy daughter did so, as well).

I'm in a weird spot right now, because I'm starting to give serious consideration to other options (Windows Phone, Android) because I dislike the iOS7 UI changes and because I want a significantly larger screen. But I like having all of us (my wife and daughter and I) on the same OS, since it keeps some things simpler (any of us can pick up anyone else's device and do something quickly) and things like "Find Friends" and Apple TV AirPlay, etc. So switching platforms is not an easy move for me, and I may hold off to see what the upcoming larger screen devices bring. It helps a bit that I don't necessarily love the UI of Android or Windows Phone, either, so it's not like they'll offer me a huge improvement in UI.

To clarify, when I say it's a "weird spot", I mean that Apple's stock was the first stock I ever bought, and I bought it because I really believed in the company and thought that a lot of the "experts" out there were clueless. Apple was reporting, quarter after quarter, huge profits. They were making tons of money. And I believed in their products personally. So I felt like I might be making a smart choice in taking a risk in buying their stock, because I thought I knew more than the average investor, as far as Apple was concerned. Now, I no longer have the same faith in their company. Today's news was great, but it doesn't change my opinion about whether iOS7 was a step in the right direction or a change for the worse, and I worry that the visible effect of that (in terms of Apple sales and profits) could just be delayed.

Again, sorry for the off-topic ranting.

 

[mrxak]

I agree with you 100%. I was kind of ranting there. But I also worry that there's more iOS7 hate out there than we're aware of and that could have a real effect on Apple sales as that hits people. My wife uses her iPhone 4 all of the time, but she's oblivious to the fact that she's still on iOS6. She's paid no attention to whatever notifications she may have received about an OS update being available and I've purposely held off on updating her phone because I personally thought the UI changes in iOS7 were awful and I figured she would be even more frustrated by them, since she has a lot less patience than I do (FYI, I updated my iPhone to iOS7 on day one thinking it would be great and my tech-savvy daughter did so, as well).

I'm in a weird spot right now, because I'm starting to give serious consideration to other options (Windows Phone, Android) because I dislike the iOS7 UI changes and because I want a significantly larger screen. But I like having all of us (my wife and daughter and I) on the same OS, since it keeps some things simpler (any of us can pick up anyone else's device and do something quickly) and things like "Find Friends" and Apple TV AirPlay, etc. So switching platforms is not an easy move for me, and I may hold off to see what the upcoming larger screen devices bring. It helps a bit that I don't necessarily love the UI of Android or Windows Phone, either, so it's not like they'll offer me a huge improvement in UI.

To clarify, when I say it's a "weird spot", I mean that Apple's stock was the first stock I ever bought, and I bought it because I really believed in the company and thought that a lot of the "experts" out there were clueless. Apple was reporting, quarter after quarter, huge profits. They were making tons of money. And I believed in their products personally. So I felt like I might be making a smart choice in taking a risk in buying their stock, because I thought I knew more than the average investor, as far as Apple was concerned. Now, I no longer have the same faith in their company. Today's news was great, but it doesn't change my opinion about whether iOS7 was a step in the right direction or a change for the worse, and I worry that the visible effect of that (in terms of Apple sales and profits) could just be delayed.

Again, sorry for the off-topic ranting.

It's good to know more than the average investor about a particular stock, but unless the rest of the market catches up with your knowledge, at some point, it doesn't really help if you think a stock is undervalued if nobody else does. I've personally invested in AAPL because I believe it's undervalued and I believe the market will realize it fairly soon as Apple adds new product categories.

Additionally, you need to be careful that you don't mistake your personal feelings about a product for the market as a whole's feelings about a product (the consumer market, not stock market). When it comes to iOS7, you are simply wrong. People love iOS 7. A very small minority of people who hang out all day trashing Apple on Apple news sites like this one are not indicative of any larger trends. Apple's sales figures keep going up. AAPL is still a good investment. I've personally invested in plenty of companies for which I'd never buy their products, but I know other people like them, and so the companies are good to buy shares of. Even if you end up buying a Windows phone or whatever, based on your own preferences, you would be wise to keep investing in Apple because it's a far better investment than Microsoft.

 

[IJ Reilly]

I don't buy one share at a time, but if i recall correctly TC said that a lower share price (through a split ) opens up the stock to investors that do not have a large amount of money per investment yet still want to play around in the market on their own..

I don't know if he said that, but if he did I can't imagine why, since it really doesn't make any sense. Maybe in the old days when the brokerage fees made it expensive to buy or sell in odd lots, but that isn't true anymore. All it really does is lower the investment required buy a single share.

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So when should the split be showing up to be able to purchase?? at about $75 a share I'd be inclined to buy.

Right! The stock will be on sale!

 

[ssgbryan]

I'm curious to know the reason behind the iPad miss. Supply constraints or people aren't buying. I find that really curious. It will be interesting to hear what they say.

As for the stock split - splits are largely meaningless. They don't affect the value of the company. The dividend will be 1/7 of what it is now. About the only advantage is that buying a few shares will be a bit more accessible at ~$75 instead of ~$525 for people who don't buy large chunks at a time.

I suspect that it is due to the fact that an iPad doesn't need to be upgraded as quickly as an iPhone.

In my example - my mission critical apps are the Apple remote (for my A/V system) and Kindle.

I haven't seen anything added to the iPad that would justify upgrading. I'll be using my iPad 2 until it dies. For others, it would be different.

 

[The Barron]

Steve wasn't always right.

Stock splits are soooo 1990s! They're really just a smokescreen to make it (very slightly) harder to compare the stock price over time.

Steve would never have allowed it.

Hard to say what Steve would have thought. Regardless, the board has to bless it & if they thought the resistance level had been reached for far too long, they'd "pull the trigger."

 

[FluJunkie]

so I can't think of any reason why AAPL on the DIJA would hurt.

"Apple is now a big, boring blue chip stock. Innovation is dead, they'll never do anything again. This never would have happened if Jobs were alive."

Have I mentioned how much I hate the investing press

 

[SusanK]

Hard to say what Steve would have thought.

Steve did. Twice. 2000 and 2005.