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Apple Stock Splits 7-for-1, Opens at $92 With All-Time High Just Over $100
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What this means, as usual, is that the biggest shareholders just got richer and likely paid little or no tax on the income. The rest y'all got yer crumbs. Enjoy. 
Maybe they don't, but the lower price could attract more investors, which could lead to higher prices due to the demand. That's not a long-term effect though. Generally, a stock split means very little but it lowers a psychological barrier to investing for people without as much money (or for people into options).
More info about the effects of Apple's stock split: http://blogs.wsj.com/moneybeat/2014/06/09/what-apples-stock-split-means-for-you/
Well 100 shares at IPO = 200 shares after split in 1987, 400 shares after split in 2000, and 800 after split in 2005. With todays 7-1 split, I would now have 5600 shares. And at today's openning price of $92 it would be worth $515,200 for an initial investment of $2,200. So I actually think my math is correct. The problem is that you missed the timing of the purchase. In my example it was at IPO, where your calculation was at iPod release. A big difference.
I stand corrected -- I bought my shares in 2001, so I only got one stock split. I'll join you in that time machine.
I'm sure some stockholder woke up this morning, saw Apple stock so low and completely freaked out!
*raises hand*
But caught on real quick. And I'm pretty stoked that ~50 shares turned into ~300. Now let's drive them prices back up!
Thank you for the advice.
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And thanks to you too, I will not rush into anything.
I'm sure some stockholder woke up this morning, saw Apple stock so low and completely freaked out!
I didn't freak out but I had forgotten and got a fair surprise!
Yep, I finally plunged at the 92 price and bought it this morning. Got about 35 shares. Figure I'll just let them be and see what happens in a few years.
Apple is definitely to low in my opinion, just a PE rating of 15. That is they need 15 years of net income to pay back all the stock, that is very low for a growth stock. Coke has a PE of 28 and Amazon 500 and Google 30.
That the stock will double in price is a no-brainer for me, that's a given. But they can do so much more the next years in lots of sectors, home automation, medical equipment, banking, city building etc.
Apple is perfect for mid- to longterm investment, not if you need the money in a few months. I believe it will keep growing to at least PE 30 but we don't know for sure, it will probably dip now and then.
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Nitpicking.
27 can't be divided by 7.
Oh crap. Thats what happens when I havent had my USDA ration of two pots of coffee. I cant type.
Oh crap. That’s what happens when I haven’t had my USDA ration of two pots of coffee. I can’t type.
That's OK. Everyone is entitled to a mistake every once in awhile. Heck, this guy...
*raises hand*
But caught on real quick. And I'm pretty stoked that ~50 shares turned into ~300. Now let's drive them prices back up!
...is going to be happier when he finds out that he has ~50 more shares than he thought.
I have a US dollar denominated trading account here http://www.tddirectinvesting.co.uk/
You can also just sign up with many UK brokers and have them buy US shares with £ but if you are buying and selling frequently you'll take a significant hit on the exchange rate because every time you buy and sell the money gets converted between £ and $ and a noticeable amount evaporates away on every exchange. With a US dollar denominated account you buy and sell in $ and everything stays as $ until you want to extract some money out as £.
If you just wanted to buy apple shares and hold for a long time, such an account is not necessary though, you will take a one time hit converting £ to $ to buy them in the first place anyway, you just need a share trading account that lets you buy US shares..
There are probably some ISAs that will let you buy US shares, I think mine does (Hargreaves Lansdown, there are many others) but I have never done that so cant be sure. I do own some US mutual funds in it though (US-speak for unit trusts), mostly trackers.
I for one an very happy that the stocks spit today. I have been waiting to invest in Apple for a few years not but since the price of each share was just to high I wasn't able to (granted the money that I spend today I could have done it and would have spent the same about with the amount of shares I would have gotten in the split).
I should add that this is my first time I have purchased any stock share on my own and will be holding onto these shares for the long term so fingers crossed all goes well! Hope to see my investment double, triple, or more!
I should add that this is my first time I have purchased any stock share on my own and will be holding onto these shares for the long term so fingers crossed all goes well! Hope to see my investment double, triple, or more!
What this means, as usual, is that the biggest shareholders just got richer and likely paid little or no tax on the income. The rest y'all got yer crumbs. Enjoy.
The world must really suck for you. The stock was worth no more than when it closed on Friday.
That makes no sense at all.
If for example you had $700 to spend, whether that was one share at $700 or post-split seven at $100, the price is the same in terms of what the shares are worth. And you'd have been better off buying one at $450 a year ago than seven now. If you don't understand this you shouldn't be buying shares.
That makes no sense at all.
If you don't understand this you shouldn't be buying shares.
Well, there is a rational to it. Small investors like to sell off some stock at regular times, a bit from every company they own to spread out. That is much harder to do with a stock nearing $700 and there other stock below $100.
They want simplicity and say to there bank to sell 5 of each company or something like that.
I see myself way smarter than that but then again, i also only bought Apple stock 15 years ago when it dropped to $70
($35 a few weeks later ), and never bought any additional stock sinds then. Apparently i used the same rational.
Agreed, then it's pure a psychological thing, for a long term investment the share price itself isn't important except for very small investments.
That makes no sense at all.
If you don't understand this you shouldn't be buying shares.
You are assuming that he would know that the shares would split eventually. For many investors (especially for retail), a stock with a price so high that you can only afford one (1) share makes it less attractive than another wherein you can buy multiple shares. Thus, people tend not to spend all their money on a single share of apple, seeing as even if the stock went up 50 points (which would be a huge gain in the stock market), they would only net $50 on an investment of $700. Makes it not worth the risk.
Now that people can afford multiple shares, the stock looks more attractive. And they need not have any fore-knowledge of any upcoming splits. I spend $700, and own 7 shares, and if each share were to climb $50 (very likely given the upcoming catalysts), I would profit $350 on a $700 investment.
This is why splits are advantageous, and why stocks that split generally outperform the market in general and are up many percentage points in the year following the split.
But you are right, generally speaking, that there is no fundamental difference between 1 $700 share of apple and 7 $100 shares, EXCEPT for the psychological advantage that $100 shares have, which results in many tangible benefits, and the very real advantage of having gains come in whatever multiple of the stock you are able to buy due to the lower price.
An real world example: AAPL is up $1.48 today. Had it been presplit, at 1 share ownership, you would have made $1.48 in profits had you sold your $700 share.
Post-split, say you owned 7 shares of AAPL: You didn't gain $1.48, you gained $10+.
Splits make a difference, and anyone that says otherwise doesn't understand a very basic principle of investing: it's better to own more shares when you can have those shares for the same investment as you would have had to make to buy fewer shares or one share.
And to say you'd be better off buying in at $450 a year ago is absurd wherein you are taking advantage of hindsight. Why stop there? I would have been better buying Apple back in the 90s. I should have just bought millions of shares and held throughout all the years. Anyone that applies this hindsight (especially when used to put someone down indirectly) has never invested in the stock market. Real investors know what it is like to watch a stock move throughout the day and not know precisely where it will wind up.
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