Here's how Apple's four-for-one stock split works
Monday at end of trading is a key deadline for full participation in Apple's four-for-one stock split. Here's how it works, and what you need to know about the August 24 start of the process, and completion on August 31.
Announced as part of Apple's quarterly results on July 30, Apple's Board of Directors approved a four-for-one stock split, with the intention of making the stock "more accessible to a broader base of investors." The split will considerably increase the number of common shares in the company, from approximately 12.6 billion to 50.4 billion.
Apple will start recording who owns shares in the company from the close of business on Monday, with those still holding onto shares at that time set to receive an additional three shares for each share owned. According to Apple's FAQ, the "Split Date" will be August 28 and will take place after the close of business.
The "Ex Date," the date determined by Nasdaq when Apple common shares will trade at the new split-adjusted price, will be August 31.
Apple warns that anyone who sells shares on or after the Record Date but before the Ex Date will be selling them at the pre-split price. Sellers also surrender their entitlement to split shares, as they will be passed along to the new owner of the sold shares.
Buying shares on or after the Record Date of August 24 but before the August 31 Ex Date will be charged at the pre-split price, and would also be eligible to gain the extra shares from the stock split. While it may seem that you have to buy shares before the end of business on Monday to quality, Apple's FAQ advises that it's more a case of owning shares before the Ex Date, with the only difference being flexibility in how much the share costs.
Each share stock post-split will be worth 25% of the price of record. If the stock price doesn't change between the Record Date and the Ex Date, the sum total value of the holdings will be identical, though in reality the price will change due to the major trading event.
Just hours before the August 24 close of trading, Apple's shares hit a record $500 milestone price.
The stock split will be Apple's fifth since going public. Previously it performed a 2-for-1 split on May 15, 1987, as well as June 21,2000, and February 18, 2005. On June 6, 2014, a stock split took place on a 7-for-1 basis.
Apple is in exceptionally good footing for the stock split, having become the first U.S. company to have a $2 trillion market capitalisation as of August 19.
Announced as part of Apple's quarterly results on July 30, Apple's Board of Directors approved a four-for-one stock split, with the intention of making the stock "more accessible to a broader base of investors." The split will considerably increase the number of common shares in the company, from approximately 12.6 billion to 50.4 billion.
Apple will start recording who owns shares in the company from the close of business on Monday, with those still holding onto shares at that time set to receive an additional three shares for each share owned. According to Apple's FAQ, the "Split Date" will be August 28 and will take place after the close of business.
The "Ex Date," the date determined by Nasdaq when Apple common shares will trade at the new split-adjusted price, will be August 31.
Apple warns that anyone who sells shares on or after the Record Date but before the Ex Date will be selling them at the pre-split price. Sellers also surrender their entitlement to split shares, as they will be passed along to the new owner of the sold shares.
Buying shares on or after the Record Date of August 24 but before the August 31 Ex Date will be charged at the pre-split price, and would also be eligible to gain the extra shares from the stock split. While it may seem that you have to buy shares before the end of business on Monday to quality, Apple's FAQ advises that it's more a case of owning shares before the Ex Date, with the only difference being flexibility in how much the share costs.
Each share stock post-split will be worth 25% of the price of record. If the stock price doesn't change between the Record Date and the Ex Date, the sum total value of the holdings will be identical, though in reality the price will change due to the major trading event.
Just hours before the August 24 close of trading, Apple's shares hit a record $500 milestone price.
The stock split will be Apple's fifth since going public. Previously it performed a 2-for-1 split on May 15, 1987, as well as June 21,2000, and February 18, 2005. On June 6, 2014, a stock split took place on a 7-for-1 basis.
Apple is in exceptionally good footing for the stock split, having become the first U.S. company to have a $2 trillion market capitalisation as of August 19.
Comments
When the post split stock gets to around $190 (haven't done the math), we'll be there.
BTW, it's valued at $2.1T at the moment, so it's already 10% of the way there, of the $1T between $2 and $3T.
As you indicate, there are only about 4.3 billion shares outstanding. Soon there will be around 17 billion outstanding. Apple could issue many more (without retiring any) if it wanted.
Which date matters depends on the perspective we're looking from. From Apple's perspective, shareholders of record on August 24th (today) get the additional shares. (On a side note, most people who own shares through an online broker aren't really shareholders of record; but we'll leave that issue aside and proceed as though they are.) Any trades made through Nasdaq between today and the end of trading on Friday have, in effect, a notation attached to them which means that the seller - who will get the additional shares on Friday - owes 3 more shares (for each 1 sold) to the buyer. From Apple's perspective, those additional shares will go to the original owner, i.e. the owner as of today. But Nasdaq has a process whereby it transfers those additional shares to the buyer (if they buy by Friday).
So from a buyer or seller's perspective, the additional shares go to whoever owns the shares at the end of trading on Friday. But from Apple's perspective, the additional shares go (at the end of trading on Friday) to whoever owned the shares today. There's an automatic process which happens outside of Apple which gets, or is supposed to get, the additional shares to the right owner - i.e., the owner as of the close of trading on Friday.
All that said, if a private trade happens - i.e., one that doesn't go through Nasdaq - between today and Friday then the buyer should be sure that means are in place whereby they will get the additional shares from the original owner after the original owner receives them on Friday.
No, it’s not. Are you being facetious? You can’t be serious.
Anytime you buy shares before it splits, you get 4 shares instead of the one you bought. These timings are due to when share pricing is frozen for a short time. Don’t worry about it. If you want to buy shares, just buy them.
Tesla is a better example of a potential bubble. Their price seems to be based on where people think the company will be in 10 years, rather than the production level it is at now (selling 1/10 as many cars as Chevrolet last year and how much lower is GM's market cap? Toyota's? etc?)