Apple stock split is complete, and with its shareholders on Friday now gaining four times the number of shares in the iPhone and Macbook maker than they had yesterday. The company seeks to make its stock “more accessible” to smaller investors.
Announced on July 30 and approved and authorized by Apple’s Board of Directors, the four-for-one stock split will increase and boost the number of common shares acquirable in the company from approximately 12.6 billion to 50.4 billion outstanding shares and the number of authorized and certified shares combined. This move effectively quadruples the amount of Apple stock each stockholder has in the company; however, it remains the same.
The tech giant began listing which shareholders had stock in the company since August 24, with those viewed to still have stock shares before August 31 that will be gaining three additional shares in the company. The stock split itself started at the close of business on August 28, while August 31 marked the first session set by Nasdaq that Apple’s common shares will now be traded at a new split-adjusted price.
If a stock split doesn’t change its value, why has Apple’s stock price gone up so much before its split off and is continually rising after the breakup? One explanation is that new and less-experienced investors may have difficulty understanding how stock splits work and is just excited about acquiring more shares of the tech company. Another reasoning could be that investors and shareholders who could not afford to buy shares at $500 can now get one at $125.
The best explanation probably is that expert traders understand that a lot of people get excited about splits. Hence, they purchase the stock ahead of what they expect will be a pack of independent investors racing to buy shares after the split’s announcement.
But despite that, none of this changes Apple’s long-term value, so its effects can be temporary and brief. Possibly, Apple’s stock could yield some of its immediate gains and profits now that the split has transpired.
Apple’s stocks are still a good buy today if you shift your focus from the stock split and put your attention to the actual cause of Apple’s long-term value. The most important for Apple, in this respect, is its iPhone products. Luckily, the company looks like it’s gearing up for the 5G-driven sales for the newest version of its valued product.
Profits are what ultimately determine a company’s real value. Apple’s future is bright. Its stock, in turn, remains a buy post-split.
➡ Looking to get featured on Future Sharks?
