Analyst: Apple May be Ready for Stock Split

| Apple Stock Watch

Apple is apparently eyeing a stock split, according to Bernstein analyst Tony Sacconaghi. He sees that as a real possibility because his sources say the Mac, iPhone and iPad maker is currently investigating the option.

Apple stock may split. That's two buckets of cash!“Our belief is that there’s a reasonable likelihood that Apple will split the stock. We’re confident that the company is looking at that topic and that they’ve started soliciting input on that topic,” Mr. Sacconaghi told CNBC. “That last time they solicited input from investors was on the dividend and in short order we had one.”

A split would make Apple’s stock more affordable since the price would be lower — at least initially. Using a split to lower the stock price would also open the possibility of bringing the company to the Dow Jones stock market index.

The Dow currently tracks companies such as Wal-Mart, Microsoft, General Electric, Bank of America, and AT&T, but so far has been closed off to Apple because of the relatively high price of its stock compared to other companies. Adding Apple to the Dow index would also mean bumping another company off since the list is limited to 30 businesses, and could also add an unwanted element of volatility to the index.

A stock split may look enticing to investors, but that doesn’t mean Apple will chose to do so just to make its shareholders happy. Unless the company sees real value in making the move — which doesn’t necessarily include the possibility of joining the Dow index — then a stock split simply won’t happen.

Apple hasn’t openly said that it is considering a stock split, but the company’s secretive nature often means it considers strategic decisions without telling the public or analysts.

Mr. Sacconaghi expects Apple could initiate a stock split within six months.

Apple is currently trading at US$620.67, up 3.46 (0.57%).

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Comments

Fastflyer

Oooohhh, that would be nice. Bought Apple at $80.

FlipFriddle

Yeah. If it split, I could buy another share. It’s too much for me now.
I’ve got you beat, I bought at $15. smile But damn, how I wish I had bought a LOT more back then. My initial $500 was a lot to me then and it felt risky just a few months after the iPod debuted.

Polimon

I got in at $25 in 2003. Doing the math, the stock has appreciated 50x since then. No complaints, but I wish I’d bought a lot more. If Apple did a 10 for 1 split now, they could attract a whole new wave of young investors.

zebrum

not this again!

wab95

Thus sayeth the Sacconaghi. So let it be written. So let it be done.

Actually, this fulminant speculation has exploded across the Twitterverse, and is taking on the aura of fact, if not a fait accompli. Such a move clearly has its supporters.

I agree with your take on this, however, that Apple will only do this if it makes long term strategic sense to the company, and for no other reason.

vpndev

Some folks feel that a split, say 10-to-1 to put the price about $60, would increase investment.

Others say that it would just encourage day-traders, who tend to be cut out of the market when the price is as high as it is.

But everyone agrees that analyst speculation of this kind is intended to boot the analyst’s creds. And I am not interested in the least in doing that.

These people are fringe-dwellers nibbling for free around the edge of what Apple has done - in spite of them. Just as bad as the death-knell bell-ringers. Where’s Rob Enderle when you need him?? He could turn around this euphoria in a moment.

benoir

“A stock split would make Apple’s stock price more affordable since the price would be lower…..”

No, it does not make it more affordable it just means you buy smaller bits…...

Is it really that hard to understand basic math????

vpndev

?A stock split would make Apple?s stock price more affordable since the price would be lower?..?

No, it does not make it more affordable it just means you buy smaller bits?...

Is it really that hard to understand basic math????

There are several things in play here, besides basic math.

Perhaps you’ll enlighten us with your analysis of the Berkshire-Hathaway stock price. That could make an interesting comparison with the Apple scenario. I’m interested to hear more.

Ezra

Don’t use logos without permission. It is bad form. MoneyWell is a great Mac application from no thirst software. That is their old bucket logo

Annmarie

I need feedback pls…. I have $15,000 and want to buy Apple and IBM stock tomorrow… is it a good move to buy at $620 price for apple? what about if they go to split soon?

vpndev

Split is no issue. You just buy more shares at a lower price, for the same total.

If I had $15K to invest tomorrow, I would buy Apple. IBM is a good stock (I own a bit of that also) but it doesn’t have the upside of Apple. I bought some recently at $610 then it dropped to $570. No matter - it came back. I also have some at $380, some at $115 and some even lower. I’m not selling—I think you get the picture.

But this is not “advice” - just my personal experience. Yours may be different (aren’t lawyers wonderful)

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