May 5th, 2000

[12:00 PM] Who Is Eligible For Apple's Upcoming Stock Split? by Wes George Apple is preparing to split the company's stock two for one. AAPL will begin trading at the split adjusted price on the morning of June 21. The company says it will issue each "shareholder of record on May 19, 2000 one additional share for every outstanding share held on the record date..." The official announcement sounds as if you must purchase your shares of AAPL before May 19th to get in on the stock split. Not so. The wording is a legal invention from the slower days when investors actual held paper stock certificates in their wall safes. Eric Yang eloquently explains in detail at appleinvestors.com why buying shares of AAPL anytime before June 21 will allow you to participate in the stock split: In short, when a transaction occurs between the record date and the distribution date, a "due bill" is attached to the transaction. So, in theory, new shares goes to the seller who happens to be the shareholder of record, but those shares are immediately transferred to the buyer. In reality, all of these transfers are handled by the brokerage automatically, and the investor doesn't need to do anything. Of course, whether you buy AAPL before or after the split makes zero difference to the stock's value. On June 21 the number of shares in circulation will double cutting AAPL's price in half. Earnings per share (EPS) will fall 50%, allowing the primary comparative measure of a stock's value, the price to earnings ratio (P/E) to register the same value as before the split. You do the math. The Mac Observer Spin: Contrary to the general public's good feelings about stock splits a number of studies have been unable to find any positive correlation between the actual splits and future price gains for the stocks involved. However, stock splits are symptomatic of growth in both the stock's price and the management's perception of future demand for equity in the corporation. Both are obviously bullish indications. Apple