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Apple shares crack $300 en-route to new all-time high - Page 2

post #41 of 109
10/13/10 at 8:02am
Quote:
Originally Posted by stevemost View Post

Congrats Apple!
Imagine if we were in a good economy...

One could actually make the case that in a bad economy, there's more of a flight to quality.
Who knows.
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post #42 of 109
10/13/10 at 8:02am
Quote:
Originally Posted by digitalclips View Post

LOL, you don't give in easily do you. The facts seem to disagree with you.

What facts are those? All you've stated so far is that it makes the stock SEEM more affordable. Uh yeah, that's true. Apple is perfectly liquid, and no one who is buying $290 worth of apple shares is trading somewhere that requires 100 shares to be purchased at a time.

Stock splits don't do anything except make idiots happy and provide intelligent market participants a good opportunity to spot the dummies at the table.
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post #43 of 109
10/13/10 at 8:04am
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post #44 of 109
10/13/10 at 8:05am
Quote:
Originally Posted by AppleInsider View Post

Recent market research data also indicates that Apple continues to hit on all cylinders,

Quote:
Originally Posted by zoetmb View Post

... But the fact is that they've been firing on all cylinders for a very long time

Interesting choice of words, considering that's exactly how SJ described the company... twelve years ago.

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post #45 of 109
10/13/10 at 8:06am
Quote:
Originally Posted by cameronj View Post

They allow broader ownership of a stock - if every share cost $10,000 no one could buy it. But splitting a stock from $300 to $150 only means an average person will buy 10 instead of 5 shares. No difference.

Increasingly, even the notion of 'broad ownership' is suspect.

Often, more than 80% (or more) of stocks such as Apple are held by institutions.
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post #46 of 109
10/13/10 at 8:07am
Quote:
Originally Posted by digitalclips View Post

Why is this so often stated as if it's clever to point out there share value remains the same? People ask this question because it is known that it boosts sales of stocks as they are perceived to be at a more affordable level AAPL has split in the past it will no doubt split again in the future.

Besides, don't forget options contracts which are traded at 100 options per contract. With a price of $90 for one Jan 2012 $210 call option, one option contract costs $9000. Of course, that same contract did cost around $4400 a year ago...
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post #47 of 109
10/13/10 at 8:08am
Quote:
Originally Posted by digitalclips View Post

From Investopedia web site.

You should not believe everything you read on the internet.\
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post #48 of 109
10/13/10 at 8:09am
Quote:
Originally Posted by anantksundaram View Post

Increasingly, even the notion of 'broad ownership' is suspect.

Often, more than 80% (or more) of stocks such as Apple are held by institutions.

Exactly. It helps the guy who wants to invest $150 but not $300 in Apple shares. Does that person exist? I'm sure he does, somewhere. Does he matter? No. In fact he is clearly getting a bad deal, because the smaller amount you buy the larger the percentage of your purchase that goes to the broker instead of to your own future.

Oh well, it's an age old question - as you see from this thread, the people who believe the lie that splits matter have themselves convinced. Some people can't be educated.
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post #49 of 109
10/13/10 at 8:09am
Quote:
Originally Posted by digitalclips View Post

It is amazing, a quick scan of many Apple blogs and all are having the exact same argument ...

Team A: It is mathematically the same ... no point ... doesn't change anything.

Team B: Many, many examples of actual stock splits showing huge gains in buying interest and positive results.

Team B is confusing cause and effect.
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post #50 of 109
10/13/10 at 8:13am
Quote:
Originally Posted by cameronj View Post

What facts are those? All you've stated so far is that it makes the stock SEEM more affordable. Uh yeah, that's true. Apple is perfectly liquid, and no one who is buying $290 worth of apple shares is trading somewhere that requires 100 shares to be purchased at a time.

Stock splits don't do anything except make idiots happy and provide intelligent market participants a good opportunity to spot the dummies at the table.

It is my experience when people have to use pejoratives in any discussion to make their point they are already admitting subconsciously they are unsure of their position. That or they are simply really obnoxious people.
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post #51 of 109
10/13/10 at 8:15am
Quote:
Originally Posted by anantksundaram View Post

Team B is confusing cause and effect.

LOL, ok, But I have to then wonder ... why did Apple split in the past? What would AAPL be today (arithmetically I mean) per share had it never split? Just curious and too lazy to work it out
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post #52 of 109
10/13/10 at 8:18am
Quote:
Originally Posted by anantksundaram View Post

Team B is confusing cause and effect.

Team B understand that the causation of doing a split does have a reaction, hence the reason why it exists and why its utilized. Same goes for a reverse stock split.

Team A isnt even considering cause and effect of the split, only the narrow view of the maths. I think Team A probably also falls under either Team Jacob and Team Edward.
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post #53 of 109
10/13/10 at 8:20am
It does make a difference for some (many).

Right now many don't have any Apple stock at $300.00, but those same people might buy 10 or so shares at $150.00. Even if it's an emotional thing, If you get 10 of something and spend $1500.00 or 5 at $300.0 I have more with the 10 shares

And just wait until those shares go to $300.00, then I've done real good.

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post #54 of 109
10/13/10 at 8:28am
Quote:
Originally Posted by solipsism View Post

Team B understand that the causation of doing a split does have a reaction....

We shouldn't be surprised if there is a small, albeit short-term, positive bump from a split. The reason is, there may be some slight signaling value: the market might infer that the management is signaling good tidings for the future (i.e., "lots of value-creating growth expected, leading to stock price gains, so why not attempt to send a signal about my insider's view of the future with a split"). In other words, the split itself is in anticipation of future stock gains. Te fact that the stock went up after the split had to do with the subsequent good performance, not the split itself.

That's what I meant by 'cause and effect.'
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post #55 of 109
10/13/10 at 8:31am
Quote:
Originally Posted by digitalclips View Post

LOL, ok, But I have to then wonder ... why did Apple split in the past? What would AAPL be today (arithmetically I mean) per share had it never split? Just curious and too lazy to work it out

I think Apple has done three 2-for-1 splits (i.e., "give me one share and I'll give you two in return") in the past.

So, in their absence, the stock would be trading for 300*2*2*2 = $2400 per share!
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post #56 of 109
10/13/10 at 8:53am
Quote:
Originally Posted by anantksundaram View Post

I think Apple has done three 2-for-1 splits (i.e., "give me one share and I'll give you two in return") in the past.

So, in their absence, the stock would be trading for 300*2*2*2 = $2400 per share!

Wow! Thanks for that ...

So, to be clear ... Team A would be just as happy with AAPL at that price ($2400 per share) and believe this would change absolutely nothing? That would be consistent with their belief splits are pointless after all.
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post #57 of 109
10/13/10 at 8:53am
Quote:
Originally Posted by zoetmb View Post

The remarkable thing is that Apple has achieved this great success in the worst recession in 80 years. And they've achieved it in spite of the fact that they are frequently perceived as being overpriced. Even though I'm a fan of the company and have owned the stock on and off for years, even I thought that Apple was going to suffer big time during the recession.

We can all (except for the fanboys) claim that Apple makes a lot of bad decisions or has a bad attitude. But the fact is that they've been firing on all cylinders for a very long time in ways that virtually no other company has been able to achieve.

The question for the future is whether their arrogance will eventually harm them and whether they can stay far enough ahead of the pack as other companies have been able to copy/emulate their technology faster and faster. It makes me laugh when the UI on almost every other smartphone looks like a copy of the iPhone.

What is "arrogant" about demanding that everything in your ecosystem provide a similar level of excellence as your own products? If msft demanded that same level of quality experience from their "partners", Apple would still be a $4.00 stock.
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post #58 of 109
10/13/10 at 9:07am
Quote:
Originally Posted by zoetmb View Post

The remarkable thing is that Apple has achieved this great success in the worst recession in 80 years. And they've achieved it in spite of the fact that they are frequently perceived as being overpriced. Even though I'm a fan of the company and have owned the stock on and off for years, even I thought that Apple was going to suffer big time during the recession.

We can all (except for the fanboys) claim that Apple makes a lot of bad decisions or has a bad attitude. But the fact is that they've been firing on all cylinders for a very long time in ways that virtually no other company has been able to achieve.

The question for the future is whether their arrogance will eventually harm them and whether they can stay far enough ahead of the pack as other companies have been able to copy/emulate their technology faster and faster. It makes me laugh when the UI on almost every other smartphone looks like a copy of the iPhone.

I agree with most of what you say except I'd switch the term arrogant for prideful. Apple are without doubt very, very careful what they allow into their eco system, demanding it conforms. This is in fact nothing new. I recall listening to Steve talking to us dealers back in the early days shortly after 1984 launch explaining how the Mac (and Lisa before that) had everything a programmer needed for an application built in ... he / she only had to deal with the specifics that made that application function ... to do its thing. The UI, the IO etc. was all taken care of. The point being once you knew how to use the Finder and one app you already knew how to use every other app (almost). This was truly revolutionary at the time. Today in addition to the comfort of the user, Apple's approach now extends to the protection of the user too.
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post #59 of 109
10/13/10 at 9:18am
Quote:
Originally Posted by digitalclips View Post

It is my experience when people have to use pejoratives in any discussion to make their point they are already admitting subconsciously they are unsure of their position. That or they are simply really obnoxious people.

Is it just me .... or is this just too funny?

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post #60 of 109
10/13/10 at 9:23am
Quote:
Originally Posted by digitalclips View Post

LOL, ok, But I have to then wonder ... why did Apple split in the past? What would AAPL be today (arithmetically I mean) per share had it never split? Just curious and too lazy to work it out

Google "what is Apple's Market Cap" and you will know the answer.
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post #61 of 109
10/13/10 at 9:27am
Quote:
Originally Posted by newbee View Post

Is it just me .... or is this just too funny?

Oh he'll say he didn't use an insult, he used a general term to describe a type of person It's an old trick on message boards
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post #62 of 109
10/13/10 at 9:30am
Quote:
Originally Posted by newbee View Post

Is it just me .... or is this just too funny?

It was deliberate sardonic humor. Sorry if too subtle
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post #63 of 109
10/13/10 at 9:32am
Quote:
Originally Posted by cameronj View Post

Google "what is Apple's Market Cap" and you will know the answer.

I ask you this, as recently calculated by a fellow poster... without any splits, AAPL would be $2400 a share. This would have zero effect on anything by your reasoning?
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post #64 of 109
10/13/10 at 9:44am
Quote:
Originally Posted by digitalclips View Post

It was deliberate sardonic humor. Sorry if too subtle

I did say it was funny .... sorry if you "missed" that.

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post #65 of 109
10/13/10 at 10:00am
Quote:
Originally Posted by digitalclips View Post

I ask you this, as recently calculated by a fellow poster... without any splits, AAPL would be $2400 a share. This would have zero effect on anything by your reasoning?

I don't even want to engage them anyone in this discussion. He's a poster I like and respect on this forum but it's an obtuse and silly notion to think companies spend time and money to split or reverse split a stock when it makes no difference. In fact, his argument means that it costs the company and therefore shareholder money to complete this economic feat. If that is case then all shareholders should file injunction against any all companies that do such wasteful and pointless things.

He says the MC would change a penny if the stock was $2,400/share. If he really thinks the price per share makes no difference then he also has to think that about $10,000/share or $100,000/share or $1,000,000/share or $10,000,000/share.
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post #66 of 109
10/13/10 at 10:00am
Quote:
Originally Posted by digitalclips View Post

I ask you this, as recently calculated by a fellow poster... without any splits, AAPL would be $2400 a share. This would have zero effect on anything by your reasoning?

That's not true - Apple split many times before it went public. The value of the share without any splits would be the value of the company.

And no, Apple's stock price would be no different without splits (your $2400) than with splits.
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post #67 of 109
10/13/10 at 10:01am
Quote:
Originally Posted by solipsism View Post

I don't even want to engage them anyone in this discussion. He's a poster I like and respect on this forum but it's an obtuse and silly notion to think companies spend time and money to split or reverse split a stock when it makes no difference. In fact, his argument means that it costs the company and therefore shareholder money to complete this economic feat. If that is case then all shareholders should file injunction against any all companies that do such wasteful and pointless things.

He says the MC would change a penny if the stock was $2,400/share. If he really thinks the price per share makes no difference then he also has to think that about $10,000/share or $100,000/share or $1,000,000/share or $10,000,000/share.

You realize that none of the money spent when buying a share goes to the company, right? Once a company goes public, all shares are sold and bought by third parties, the company has no gain or loss as a result, except of course when it issues new shares (a secondary offering).
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post #68 of 109
10/13/10 at 10:13am
Quote:
Originally Posted by newbee View Post

I did say it was funny .... sorry if you "missed" that.

Haha I was really replying to the wrong person there sorry
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post #69 of 109
10/13/10 at 10:15am
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Originally Posted by SpamSandwich View Post

It took a lot of guts to admit that... but I still couldn't help but laugh out loud when I read it. Sorry.

+1... Sorry for that!
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post #70 of 109
10/13/10 at 10:15am
Quote:
Originally Posted by cameronj View Post

That's not true - Apple split many times before it went public. The value of the share without any splits would be the value of the company.

And no, Apple's stock price would be no different without splits (your $2400) than with splits.

I didn't say the stock value would change. I asked if it would have any effect on anything ... would $2400 a share (pick any massively high number simply as a discussion point) change any dynamics what so ever? Team B's reasoning says it would, Team A's says it wouldn't. I was wondering if an extreme case might make you see the obvious.
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post #71 of 109
10/13/10 at 10:28am
Quote:
Originally Posted by Mac_Keeper_Fan_Mod View Post

Every time Apple achieves something I remember Michael Dell and his advice to Apple when he said Apple should reimburse the money to the stock holders.
Ironic eh?
Apple 300.76
Dell 14.06

hehehe

Better to show the valuation and/or profits. Stock price or number of shares on their own are ambiguous.


Quote:
Originally Posted by digitalclips View Post

I didn't say the stock value would change. I asked if it would have any effect on anything ... would $2400 a share (pick any massively high number simply as a discussion point) change any dynamics what so ever? Team B's reasoning says it would, Team A's says it wouldn't. I was wondering if an extreme case might make you see the obvious.

Without even knowing what splits are the fact that the exist and are utilized implies they have some sort of effect which is a change which is a difference.
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post #72 of 109
10/13/10 at 10:36am
Quote:
Originally Posted by solipsism View Post

Thanks to Apple i can afford to pay people to tell me how cool I am.

No need. I'll tell you for free... once.

Proud AAPL stock owner.

 

GOA

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GOA

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post #73 of 109
10/13/10 at 10:40am
Quote:
Originally Posted by ncee View Post

It does make a difference for some (many).

Right now many don't have any Apple stock at $300.00, but those same people might buy 10 or so shares at $150.00. Even if it's an emotional thing, If you get 10 of something and spend $1500.00 or 5 at $300.0 I have more with the 10 shares

And just wait until those shares go to $300.00, then I've done real good.

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There is definitely a psychological component to stock buying and selling. We all do things for irrational reasons even if we use "facts and figures" to justify our actions.

Proud AAPL stock owner.

 

GOA

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GOA

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post #74 of 109
10/13/10 at 10:50am
Quote:
Originally Posted by solipsism View Post

Better to show the valuation and/or profits. Stock price or number of shares on their own are ambiguous.

True. However, it's noteworthy that in the thirteen years since Michael Dell made his infamous statement, AAPL is up over 5319% while Dell has been essentially flat.

http://news.cnet.com/Dell-Apple-shou..._3-203937.html

http://www.google.com/finance?chdnp=...ntsp=0&fct=big

http://www.google.com/finance?chdnp=...ntsp=0&fct=big

An even more damning analysis shows a distinct divergence about five years ago. AAPL has risen 839% while Dell has declined 66%.
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post #75 of 109
10/13/10 at 11:15am
Quote:
Originally Posted by solipsism View Post

I don't even want to engage them anyone in this discussion. He's a poster I like and respect on this forum but it's an obtuse and silly notion to think companies spend time and money to split or reverse split a stock when it makes no difference. In fact, his argument means that it costs the company and therefore shareholder money to complete this economic feat. If that is case then all shareholders should file injunction against any all companies that do such wasteful and pointless things.

He says the MC would change a penny if the stock was $2,400/share. If he really thinks the price per share makes no difference then he also has to think that about $10,000/share or $100,000/share or $1,000,000/share or $10,000,000/share.

You are the only one who has included reverse splits in your argument and it only muddies the conversation. There are actually legitimate reasons for a company to do a reverse split, e.g. some institutional investors will not buy a stock below a certain per share cost, some stock exchanges delist a stock if its stock price falls below a certain value. Clearly, these considerations do not apply in the case of forward stock splits.

You are correct in noting that stock splits cost the companies money in administrative costs. This is part of the reason we see fewer stock splits these days.
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post #76 of 109
10/13/10 at 11:16am
Quote:
Originally Posted by john galt View Post

True. However, it's noteworthy that in the thirteen years since Michael Dell made his infamous statement, AAPL is up over 5319% while Dell has been essentially flat.

http://news.cnet.com/Dell-Apple-shou..._3-203937.html

http://www.google.com/finance?chdnp=...ntsp=0&fct=big

http://www.google.com/finance?chdnp=...ntsp=0&fct=big

An even more damning analysis shows a distinct divergence about five years ago. AAPL has risen 839% while Dell has declined 66%.

Amazing .... how the mighty have fallen eh?

I suspect the same model Dell et al used so well for a long time, i.e. build cheap junk and put on an OS from a software company (MS) is not going to work as well the second time around. I am referring to Android and all the hardware manufacturers seeing it as their second coming. Time will tell of course but their margins even with a free OS are going to be pared to the bone as they all fight over the same turf.
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post #77 of 109
10/13/10 at 11:20am
Quote:
Originally Posted by solipsism View Post

.... but it's an obtuse and silly notion to think companies spend time and money to split or reverse split a stock when it makes no difference. In fact, his argument means......

Not sure if you mean me in reference to this, but my argument was somewhat the opposite (and perhaps a tad subtle): that companies might think that it makes a difference if there is signaling value in the marketplace.
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post #78 of 109
10/13/10 at 11:23am
Quote:
Originally Posted by quinney View Post

There are actually legitimate reasons for a company to do a reverse split, e.g. some institutional investors will not buy a stock below a certain per share cost, some stock exchanges delist a stock if its stock price falls below a certain value. Clearly, these considerations do not apply in the case of forward stock splits.

Good points there!
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post #79 of 109
10/13/10 at 11:27am
Quote:
Originally Posted by digitalclips View Post

So, to be clear ... Team A would be just as happy with AAPL at that price ($2400 per share) and believe this would change absolutely nothing? That would be consistent with their belief splits are pointless after all.

In principle, yes, Team A would be just as happy. In practice, there is a comfort and convenience factor (e.g., similar to why we don't observe million dollar bills in circulation, although there are many millionaires) which, when combined with the fact that it doesn't hurt and may allow insiders to signal something about future prospects for the company at the margin, that might make someone from Team A shrug their shoulders and go 'whatever.'

That does not, however, make Team B right.
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post #80 of 109
10/13/10 at 11:38am
Quote:
Originally Posted by anantksundaram View Post

In principle, yes, Team A would be just as happy. In practice, there is a comfort and convenience factor (e.g., similar to why we don't observe million dollar bills in circulation, although there are many millionaires) which, when combined with the fact that it doesn't hurt and may allow insiders to signal something about future prospects for the company at the margin, that might make someone from Team A shrug their shoulders and go 'whatever.'

That does not, however, make Team B right.

The idea of sending a positive signal may have been a factor at one time, but now I believe individual investors have much better information, so it is not necessary for a company to communicate in that way. Additionally, I don't necessarily trust insiders. What they might be doing is trying to get a short term bump so they can dump their shares or survive the next shareholder meeting.

To the people desiring Apple to split its stock on the theory that it will cause the price to rise:
I don't think AAPL would see any price bump by splitting their stock. With its massive market cap, there are not enough investors only able to spend <$300 to increase demand for AAPL enough to affect the price significantly.
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