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Apple announces 7-for-1 stock split, buybacks bumped to $90 billion - Page 2

post #41 of 202
Quote:
Originally Posted by shurenuff View Post
 

How are the dividends per share affected by this?  Are they now divided by 7 once the stock splits or are the still going to pay out the $3 something per share after the split?

The dividend payout is mid-May. The stock split is in early June. The $3.29 share dividend will have already been dispersed to shareholders. If you don't have shares of AAPL at the end of day on May 12th, you don't get the upcoming dividend payout.

 

The next time Apple announces quarterly results, they'll say what the dividend will be. Assuming they stick with the same rate (2.5%), the new quarterly dividend would be about one-seventh of the upcoming payout. Let's say post-split AAPL is trading at $80 in mid-June; the new quarterly dividend payout would likely be around $0.50 per share.


Edited by mpantone - 4/23/14 at 2:58pm
post #42 of 202
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
post #43 of 202
Quote:
Originally Posted by Rogifan View Post

Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.

 

We might less of those drastic fluctuations, but there are a lot of reasons why a company might opt for stock splits. This is usually done when a stock price can't attract more buyers of the stock because stocks are typically bought in block of a 100 shares, so if you wanted to buy Apple stock you'd have to spend 100 x $535 = $53,500. Most average working class people that invest money in the market can't just buy $54K worth of stock at once.  But they can better afford to buy $7600 worth at once. 


Now, typically Apple was doing 2 for 1 stock splits when it hit $100 a share, but for whatever reason, they didn't continue that trend, so they kept it rising and rising until it reached a point where it doesn't really move.  Obviously, paying dividends is one way to attract buyers and to KEEP those shareholders to prevent lots of sell offs.  

 

Now, If you look at Microsoft, they were doing stock splits routinely until around 2000 and then they just stayed at that $30 range.  But the company hasn't really done much in terms of growth. Microsoft also has about 8.5 Billion shares outstanding whereas Apple before today, only had about 900 Million shares, so Apple wasn't as diluted.


If you look at Google, they only had about 330 Million shares before they did their recent stock split.  Why they want to keep their price so high to avoid average people to invest is beyond me.

 

I think it was a good move for Apple to do a stock split, I actually think they should have been doing this every time they hit $100 a share instead of waiting so long, but it is what it is.


Now they increased their stock buyback so they can repurchase some of those shares back when they need to.  The problem they want to avoid is being too diluted.  I think that's Microsoft's problem.  Apple is very similar in the number of shares outstanding, but at least Apple has far more profit per share than Microsoft.  We just have to hope that Apple doesn't products products that lose margin like Microsoft's been doing with their Xbox, Zune, Surface products OR waste Billions of dollars on turkey companies.

 

I certainly wasn't expecting a 7 for 1 split.  Maybe a 3 for 1 at the most, but this should be good for the stock value as it will attract more buyers (hopefully) that will hang onto the stock because of the dividends, which may increase down the road.  

post #44 of 202
I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.

So how long until the split shares hit $100?
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post #45 of 202
Quote:
Originally Posted by OcelotWreak View Post

I do _NOT_ pity the poor fools who shorted APPL today before the news. "They" are all the usual whining market manipulators who try to tank the stock every quarter because they are unhappy that APPL only sold 50 million iPhones, when of course Apple should have sold 60 million according to their Wall Street Guesstimates. Let them eat their APPL 'shorts' today!

You do realize that WST will be titling "Apple doomed" tomorrow as usual? It is all about milking the cow, not about the news 1wink.gif

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #46 of 202
Quote:
Originally Posted by Rogifan View Post

Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.

Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.

Tomorrow things will heat up and Apple got a huge discount on their buy back.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #47 of 202

Funny.  Here was my reply from Investor Relations apple in May 2012 when I pleaded with them to split the stock.  This is a copy and paste from my saved email as I knew he would do a 180.  

 

 

------------

 

When we announced the dividend and stock repurchase plan in March, our CEO, Tim Cook was asked about splitting the stock and here was his reply:
 
This is something that we have looked at while we were looking at this cash question. And the current information we have would suggest that there's very little support that it helps the stock. However, we are in a unique position and at a unique point in time, and so this is something that we continue to look at. And if we reached a decision that we thought it was in the best interest of Apple and its shareholders, we would do it. But again, at this point that's not how we see it. 
 
I don't have anything new to update you with today, but wanted you to have our latest public thoughts on the matter.
 
Best regards,
xxxx xxxxxxx
Apple Investor Relations
post #48 of 202
Quote:
Originally Posted by Rogifan View Post

Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.

 

Makes the stock look like it's more affordable to the average investor. That's about it.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #49 of 202
Quote:
Originally Posted by hill60 View Post

I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.

So how long until the split shares hit $100?

 

Maybe not so far off, now that Tim has explicitly said they're getting into new markets. Exciting times here we come again!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #50 of 202
Quote:
Originally Posted by quinney View Post


People who could not afford $524.75 shares could drive up the price by buying $74.96 shares, or their impact could be insignificant.
According to Yahoo finance, institutional ownership of AAPL is 62% today. Let's see how that changes after the split.

With stock broker fees around $10 or so, it makes sense to buy at least $2000 of any security to avoid spending too much of a percentage in fees. (A round trip trade would be 1% in fees) At the old price it was about 4 shares.  A split would only be needed after $1000 but I still support it for psychological value. 

post #51 of 202
island hermit
7 for 1?
Later it says 6 for 1.
More than likely 7 for 1.

You will receive 6 additional shares for every on that you already own giving you a total of 7. At the same time, in theory, the share price should drop to 1/7 of the price prior to the split as the share price x the number of shares = the market capitalization. In other words the company is worth the same after the split as before. In practice however, stock prices often rise after a split for a number of reasons one of which is that the stock is more attractive to some investors as it has a lower price.
post #52 of 202
Quote:
Originally Posted by Apple ][ View Post
 

I hear that argument a lot, but I'm not sure if I agree with it.

 

If somebody couldn't afford $500 a share, then some small investor buying a few shares for $80 won't make much difference in my opinion. It's the big players that count. The small investor doesn't mean crap. 

 

I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced

 

If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market. 

post #53 of 202
Quote:
Originally Posted by hill60 View Post

I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.

So how long until the split shares hit $100?

What are you talking about?

I don't think you understand how this works.

 

Apple issues a stock split, so all EXISTING share holders get 7 shares for each 1 share they own, but the stock price per share goes down accordingly so shareholders STILL have the same dollar amount.  What stocks splits do is that it spurts more buy order than sell orders, which effectively pushes up the price per share.   More buyers than sellers means increase in stock price. More sellers than buyers means lower stock price.  After the stock split takes place, then more people should be attracted to buying the stock because it's more affordable and since it pays decent dividends, it doesn't take that long to make some money off the stock even if the stock doesn't go up in share value, because Apple hands you some cash or increases the amount of shares you own every month.  Many people opt for dividend reinvestment.

 

Now, what Apple also announced is the ability to buy back up to $90 BILLION shares.  Is Apple going to do that today?  NO. They will do that if the stock goes down and creates a buying opportunity.  It's actually contradictory, but it's how they can help keep the value of the stock in a range that makes sense.

 

You might want to take a course in investments or at least get a good, easy to read book on stock investments, they explain a lot of the fundamentals of this sort of concept of stock splits, dividends, dividend reinvestment, stock buybacks, etc.  

post #54 of 202
Quote:
Originally Posted by TBell View Post
 

 

I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced

 

If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market. 

Actually Apple took on some debt last year.  If you look at the June 29, 2013 quarter Balance Sheet, they took on about $17 Billion in debt.  If I remember correctly, I think they did this to pay dividends instead of bringing cash into the country from Ireland which would have cost them a bunch in taxes, so this way it creates some debt and the interest they pay for the debt is a write down.  I'm sure it was the better option if you ran the numbers.  Apple is already one of the largest corporate tax payers.  I think if you were in the same position as an individual, you'd probably do the same thing.

post #55 of 202
Quote:
Originally Posted by hill60 View Post


Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.

Tomorrow things will heat up and Apple got a huge discount on their buy back.

I don't believe they are actually BUYING back shares, the stock is up about $49 a share in after hours trading.   They just increased the amount of money they WOULD use for share buy back.  That doesn't mean they actually BOUGHT the shares.  I think they are just using it if the stock tumbles and creates a buying opportunity.  When a company announces a buyback, they don't necessarily buy those shares the day they announce it.  You have to REALLY pay attention to exactly what they said.  They've announced buy backs before, but didn't exercise it for months later.

post #56 of 202
a 7 for 1 split will give you 6 additional shares for every share you own. the split takes place in June and trading at the split adjusted share price will begin on June 9th. for those who need an explanation, that means that the new price will be 1/7 of the closing price at the time of the split.... there is no loss in value nor loss in your investment due to the split.
post #57 of 202
Quote:
Originally Posted by hill60 View Post

I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.

So how long until the split shares hit $100?

Go look it up 

 

http://investor.apple.com/faq.cfm?FaqSetID=2

post #58 of 202
Quote:
Originally Posted by island hermit View Post

Quote:
Originally Posted by quinney View Post

Clear and correct. How do you think splits are executed, if not by granting more shares to current owners?

First of all, you have to actually read my comment. Then proceed from there.

The headline says:  "Apple announces 7-for-1 stock split..."

The article says: "granting each AAPL stock owner six shares for each share owned..."

That is neither clear nor correct.

It should say:  "granting each AAPL stock owner an additional six shares for each share owned..."

There. Clear and correct.

Yes, that will clear it up for people who think AAPL was going to grant stock owners the shares they already owned. 1rolleyes.gif
post #59 of 202

Seriously, unless you have some formal training in the stock market, finance, and some actual experience understanding this stuff, it would be better to keep your mouthes shut. There is a LOT of misleading information people are spitting out.

 

I'm not an analyst or a stock broker, but I have a degree in Finance, have taken investment classes and got A's all the way through and have been analyzing stocks since around 1969 when I was around 10 years old and my father gave me a book on investing because I showed an interest in it.  You guys have to understand how to read various financial reports, understand investments, what these guys are talking about and what REALITY is vs what you THINK you heard or understand.

 

If you don't have any experience, college education or real understanding of this stuff, it would be better if you asked questions instead of putting out misleading information. 

post #60 of 202
Quote:
Originally Posted by Rogifan View Post

Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.

It's a way to improve the stock value as TYPICALLY, when a company announces a stock split, it gets the investment community excited.

 

Here's a little example on the upside of stock split.

 

Pre stock split, if you owned 100 shares and the stock went up $1 a share, you would make $100.

Post Stock Split, if you now owned 700 shares, and the stock went up $1 a share, you would make $700.  Hmmmm.  Obviously the downside would be equally as bad, but the psychological aspects of a stock split is usually for the positive and RARELY for the negative and the market is responding positively as the stock is up $49 a share in after hours trading, but the stock split hasn't taken effect. 

 

They just ANNOUNCED the stock split, but if you look up the actual date it takes place, I think it might be in a month or so.  you'll have to look up the actual date it becomes effective.  I didn't listen to the conference call, but this is just how it is TYPICALLY done from EVERY stock split on any stock that I've own in the past.

 

Now, when a stock is trading at $71 vs $500 a share, it's a LOT easier to go up $1 per share at this lower price.  Plus it pays a certain amount PER SHARE in dividends, so you'll make more in dividends if they continue to pay the same amount PER SHARE since you own more shares.    Since $500 is a LOT of money, only the institutions can afford it, at $71 a lot more individuals can now afford to buy some, so they kind of want to attract more working class people rather than just institutional buyers.

 

Trust me, it's a VERY positive thing when a company does a stock split.  IBM used to do it CONSTANTLY during the 60's when mainframes were the big technology play and if you invested back in the beginning before and just hung onto the stock, you would end up VERY rich.  IBM was doing things like 10 for 1 stocks splits all of the time when I was first looking at the stock market.


Now, Apple MIGHT move from Nasdaq to the DOW Jones, which for whatever reason some companies want to do, personally I could give a rip which board they trade on and that's something I still don't always think is better or worse, but they could be included in the DOW Jones average.  Some people look at stocks on different boards differently.  But I personally couldn't give a rip.  :-)

 

I currently don't own any Apple stocks directly, however some of the mutual funds I own probably do.  I wish I had some extra cash to invest, especially if they are going to go after NEW markets.  That usually means they have identified new growing markets that will be additional revenue/profits, which SHOULD increase the stock value.

post #61 of 202

Never get in a argument with a pig, "I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it." - George Bernard Shaw 

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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post #62 of 202

In theory, stock splits eventually settle and unless there are new growth prospects, the stock can languish at 1/7th the price before the split.

 

However, there is psychology at work here. It's why penny stocks attract so many people. They figure, stocks go up $s every day, imagine buying a stock for pennies! People who loosely follow Apple will think that $75/share is a bargain. They've seen $700 before and are probably thinking they will make 10X their money soon, perhaps after the iWatch and iTV are introduced.

 

People watch Apple and lament not getting in sooner. People feel richer after stock splits. It's hard to undo this psychology with statistics and charts. I think Apple is in an excellent position to ride this unexpectedly aggressive 7/1 split into stock market heaven. At the least, it will get a lot of media attention and the people who don't understand finance will try to jump in.

 

People in the know say it makes no difference but this thread is awash with excitement. That is going to drive Apple up. The growth in earnings to follow will goose it further.

post #63 of 202

It has to do with option trading, With options the number of share per contract is 100.

 

At the old price pr share you would have to  buy 100 * 525= 52'500 to buy or sell just one contract ( a PUT or a CALL)

 

Now that he shares have split,  price has dropped to about $80 

So we can sell puts ie  1 contract for $8000.00

and then possibly own the share by expiration. This may cause the stock to trade up if many people start selling put options  and then stock will settle into the usual option trading patterns as the year progresses

People who already own the stock can sell calls (covered calls) against the shares they already own and collect premium up front

 

The whole shebang will make Apple stock much more efficient for income and trading purposes.

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply
post #64 of 202
Quote:
Originally Posted by bugsnw View Post
 

In theory, stock splits eventually settle and unless there are new growth prospects, the stock can languish at 1/7th the price before the split.

 

However, there is psychology at work here. It's why penny stocks attract so many people. They figure, stocks go up $s every day, imagine buying a stock for pennies! People who loosely follow Apple will think that $75/share is a bargain. They've seen $700 before and are probably thinking they will make 10X their money soon, perhaps after the iWatch and iTV are introduced.

 

People watch Apple and lament not getting in sooner. People feel richer after stock splits. It's hard to undo this psychology with statistics and charts. I think Apple is in an excellent position to ride this unexpectedly aggressive 7/1 split into stock market heaven. At the least, it will get a lot of media attention and the people who don't understand finance will try to jump in.

 

People in the know say it makes no difference but this thread is awash with excitement. That is going to drive Apple up. The growth in earnings to follow will goose it further.

 

I love watching penny stocks reverse split. The stock leaps 5 to 10 times, depending on the reverse split. People jump in. The stock goes back to its pre-split price. Priceless... and pathetic.

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post #65 of 202
Quote:
Originally Posted by Paul94544 View Post
 

It has to do with option trading, With options the number of share per contract is 100.

 

At the old price pr share you would have to  buy 100 * 525= 52'500 to buy or sell just one contract ( a PUT or a CALL)

 

Now that he shares have split,  price has dropped to about $80 

So we can sell puts ie  1 contract for $8000.00

and then possibly own the share by expiration. This may cause the stock to trade up if many people start selling put options  and then stock will settle into the usual option trading patterns as the year progresses

People who already own the stock can sell calls (covered calls) against the shares they already own and collect premium up front

 

The whole shebang will make Apple stock much more efficient for income and trading purposes.

 

I'd still like to hear Cook's reason for the split.


Edited by island hermit - 4/23/14 at 6:43pm
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post #66 of 202
Quote:
Originally Posted by island hermit View Post
 

 

First of all, you have to actually read my comment. Then proceed from there.

 

The headline says:  "Apple announces 7-for-1 stock split..."

 

The article says: "granting each AAPL stock owner six shares for each share owned..."

 

That is neither clear nor correct.

 

It should say:  "granting each AAPL stock owner an additional six shares for each share owned..."

 

There. Clear and correct.

 

 

That's clear and correct from a shareholder perspective. But from Apple Inc. perspective, after issuing its shareholders 6 addition shares for each share they own, the total amount of AAPL stocks out there now 7X what it was before the split. So it's refer to as a 7 to 1 split. The "split" is as if the shareholder taking his share and splitting it into 7 pieces. With each piece only being 1/7 of it's valve before the split. And each piece is now considered a share. But rather than a shareholder tearing up his stock certificate into 7 pieces, Apple issues him 6 additional certificates. 

post #67 of 202
Quote:
Originally Posted by DavidW View Post
 

 

 

That's clear and correct from a shareholder perspective. But from Apple Inc. perspective, after issuing its shareholders 6 addition shares for each share they own, the total amount of AAPL stocks out there now 7X what it was before the split. So it's refer to as a 7 to 1 split. The "split" is as if the shareholder taking his share and splitting it into 7 pieces. With each piece only being 1/7 of it's valve before the split. And each piece is now considered a share. But rather than a shareholder tearing up his stock certificate into 7 pieces, Apple issues him 6 additional certificates. 

 

For fu*ks sake.

 

Could some of you please read the damn comments before replying.

 

Do you think for one minute that I don't know everything you are saying? Really?

 

The headline said one thing and the article said another.

 

Headline 7 for 1... Article 6 for 1.

 

I was adding the necessary words to make the article correct... well, more correct.

 

That is all I was saying.

 

Oh boy.

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post #68 of 202
Quote:
Originally Posted by island hermit View Post
 

I'd still like to hear Cook's reason for the split.

My guess is that he would paraphrase what is written on the Investor Relations FAQ:

 

http://investor.apple.com/faq.cfm?FaqSetID=2

 

Quote:
"We want Apple stock to be more accessible to a larger number of investors."

 

Note that this phrase would indeed cover option trading as described by Paul94544. Of course, the phrase also includes bringing the price more accessible to retail traders, as well as making the stock a more likely candidate to be included in Dow Jones Industrial Average.

 

The current high tech companies on the Dow 30 are: Cisco, IBM, Intel, Microsoft. Apple's market capitalization of $468 billion is about twenty billion more than the first three companies combined and larger than any other on the Dow 30. If Apple were elected to the Dow 30, it would be a required investment by some mutual funds, again making it more accessible to a larger number of investors.


Edited by mpantone - 4/23/14 at 7:22pm
post #69 of 202
I thought that every time Tim Cook opened his mouth, the stock was supposed to plummet.

I guess I need to think different.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
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"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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post #70 of 202
Quote:
Originally Posted by mpantone View Post
 

My guess is that he would paraphrase what is written on the Investor Relations FAQ.

 

http://investor.apple.com/faq.cfm?FaqSetID=2

 

 

Note that this phrase would indeed cover option trading as described by Paul94544.

 

I guess I could have been clearer... this time.

 

I meant, why would Cook want the stock to be more accessible this year than last.

 

One of the other members posted a reply from Apple Investor Relations saying that a stock split wasn't in the cards because it wasn't in Apple's best interest at the time. What changed?

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post #71 of 202
Quote:
Originally Posted by Paul94544 View Post

It has to do with option trading, With options the number of share per contract is 100.

At the old price pr share you would have to  buy 100 * 525= 52'500 to buy or sell just one contract ( a PUT or a CALL)

Now that he shares have split,  price has dropped to about $80 
So we can sell puts ie  1 contract for $8000.00
and then possibly own the share by expiration. This may cause the stock to trade up if many people start selling put options  and then stock will settle into the usual option trading patterns as the year progresses

People who already own the stock can sell calls (covered calls) against the shares they already own and collect premium up front

The whole shebang will make Apple stock much more efficient for income and trading purposes.

Good points.

But i would think the split would also decrease option activity because the fees on a $50k option would be 7x greater, since you would have to close 7 contracts instead of just 1.
post #72 of 202
Quote:
Originally Posted by island hermit View Post
 

I guess I could have been clearer... this time.

 

I meant, why would Cook want the stock to be more accessible this year than last.

 

One of the other members posted a reply from Apple Investor Relations saying that a stock split wasn't in the cards because it wasn't in Apple's best interest at the time. What changed?

The overall investment market changes. Things like interest rates, volatility of equity markets, price of precious metals, etc.

 

The investment landscape in 2014 is vastly different than in 2010 or even 2012.

 

Note that Apple itself has changed over the years. As mentioned elsewhere, Apple's value has increased twentyfold in the ten years of Oppenheimer as Apple's CFO. If you look at the company beyond the product line, it has changed vastly in many ways, not just its bank account, but how the company stands relative to the rest of the business world.

 

Remember that Berkshire-Hathaway split its Class B shares 50-to-1 a number of years ago. The official line at the time was the the acquisition of Burlington Northern prompted the move.

 

A well-managed thoughtful company's management team (and board of directors) will keep options open, for a confluence of events or a unique set of circumstances that present an opportunity for change.

 

Maybe as a 22-year-old, you might say, "I do not anticipate purchasing a minivan in the foreseeable future" but then you get married and have three kids. Or maybe you decide that you'll start your own house call dog grooming service. Then, maybe the minivan isn't such a bad idea.

 

The world isn't static, people and companies aren't static.


Edited by mpantone - 4/23/14 at 7:47pm
post #73 of 202
A couple of us both wanted, and predicted these specific moves on Apple's part -- larger repurchase, increased dividend, stock split - - a few months ago! 1biggrin.gif

RIP, jragosta! 1hmm.gif

And, nice coda, Mr. Oppenheimer.
post #74 of 202
It's a 7 for 1 split - one share becomes seven. In other words, if you had one share, you get six more.
post #75 of 202
Quote:
Originally Posted by mpantone View Post
 

The overall investment market changes. Things like interest rates, volatility of equity markets, price of precious metals, etc.

 

The investment landscape in 2014 is vastly different than in 2010 or even 2012.

 

Note that Apple itself has changed over the years. As mentioned elsewhere, Apple's value has increased twentyfold in the ten years of Oppenheimer as Apple's CFO. If you look at the company beyond the product line, it has changed vastly in many ways, not just its bank account, but how the company stands relative to the rest of the business world.

 

If I actually believed that a stock split would make a big difference then I too would mention everything that you have listed.

 

I don't.

 

... and the year the member received the reply was 2012. That and this year are the only two years of concern to me, re: my comment.

 

Plus... and not meaning to be rude or disrespectful, I do value the fact you replied in a civil manner... I would like to hear Mr. Cook's reason.

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post #76 of 202

Again, the investment market landscape between 2012 and 2014 are vastly different.

 

Anyhow, if you care about investing and corporate financials, I suggest you find the appropriate sources to learn more about the matter. Anonymous Q&A forums like AppleInsider is not the place to be doling out investment advice or the place to educate the masses on fundamentals.

 

Especially when the forum participants don't even understand what a 7-to-1 stock split is and start bickering about how six shares given to one owned is not a 7-to-1 split.

 

Again, I'm pretty certain that Tim Cook would just parrot what was posted to the Apple Investor Relations website. It's a pretty typical corporate statement about a stock split and it is accurate. Feel free to send Tim or Apple Investor Relations an e-mail though.

 

Good luck.


Edited by mpantone - 4/23/14 at 8:01pm
post #77 of 202
Quote:
Originally Posted by monstrosity View Post
 

 

Nothing happens particularly interesting. You get 7 times your shares at 1/7th of the price... so back to where you started.

 

Arguably pointless. Some people think it makes the shares more affordable, but in reality the number of people who buy single shares is a small fraction of the market.

 

Right, but it makes it MUCH easier to do manage your investment and schedule incremental buys when the share price isn't sky high.  Have $1000 invest and the share price is $560?  Guess you buy one share and stash the rest somewhere else.  With shares around $100 it's just easier to right-size your purchases and sales.  In the bad old days commissions were higher and it made sense to let the price go outrageously high; now that justification is basically gone.  And as others have pointed out, now it'll be easier to reinvest dividends.  Currently you have to own hundreds of thousands of dollars of AAPL stock to buy one lousy share with the quarterly dividend.

post #78 of 202
Quote:
Originally Posted by drblank View Post

What are you talking about?


I don't think you understand how this works.

Apple issues a stock split, so all EXISTING share holders get 7 shares for each 1 share they own, but the stock price per share goes down accordingly so shareholders STILL have the same dollar amount.  What stocks splits do is that it spurts more buy order than sell orders, which effectively pushes up the price per share.   More buyers than sellers means increase in stock price. More sellers than buyers means lower stock price.  After the stock split takes place, then more people should be attracted to buying the stock because it's more affordable and since it pays decent dividends, it doesn't take that long to make some money off the stock even if the stock doesn't go up in share value, because Apple hands you some cash or increases the amount of shares you own every month.  Many people opt for dividend reinvestment.

Now, what Apple also announced is the ability to buy back up to $90 BILLION shares.  Is Apple going to do that today?  NO. They will do that if the stock goes down and creates a buying opportunity.  It's actually contradictory, but it's how they can help keep the value of the stock in a range that makes sense.

You might want to take a course in investments or at least get a good, easy to read book on stock investments, they explain a lot of the fundamentals of this sort of concept of stock splits, dividends, dividend reinvestment, stock buybacks, etc.  

So how long until Apple reaches it's peak of $700 per current share, again?

That is the "magic" number.

As Samsung slumps further out of the high end Apple will be there, still at the top, raking off the cream.

43.7 million is a hell of a lot of "tiny screened" smartphones.
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #79 of 202
Quote:
Originally Posted by mpantone View Post
 

The dividend payout is mid-May. The stock split is in early June. The $3.29 share dividend will have already been dispersed to shareholders. If you don't have shares of AAPL at the end of day on May 12th, you don't get the upcoming dividend payout.

 

The next time Apple announces quarterly results, they'll say what the dividend will be. Assuming they stick with the same rate (2.5%), the new quarterly dividend would be about one-seventh of the upcoming payout. Let's say post-split AAPL is trading at $80 in mid-June; the new quarterly dividend payout would likely be around $0.50 per share.

Well its hard to say , it really depends on if we now get $1 strike pricing and what price the options will cost. I for one will be checking the option prices tomorrow when the market open to see if there is any premium to be had, because now I have 6 times as many shares as I did before. So I hope to make some "rent" on the position I own which I could not do before.

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply
post #80 of 202

which means sell on May 13th

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

Reply
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