Apple just announced its 5th stock split in history. Here's what that means — and how many shares you'd have if you bought one before its first split in 1987.
Appleon Thursday announced its fifth stock splitin its history, as the iPhone maker's stock price marched to the $400 level.
- Apple said a stock split would allow it to "appeal to a broader base of investors." The move will appeal to investors who have a difficult time buying a stock sporting a triple-digit price.
- Apple said that on August 24, investors would receive three additional shares for every one share they owned, while the stock price would be divided by four, bringing it closer to $100.
- Apple last split its stock in 2014, when it enacted a 7-for-1 split as its share price reached $700.
- Here's how many shares an investor would own if they'd bought a single share before Apple's first stock split.
- Visit Business Insider's homepage for more stories.
Apple said it would enact a 4-for-1 split on August 24, meaning that each share owned by an investor today will turn into four shares. At the same time, Apple's stock price will be quartered, from about $400 now to about $100 when the split happens.Apple's dividend will also be quartered to reflect that share change once the split goes through.Advertisement
The stock split will have zero impact on Apple's fundamentals or market value but will help the stock "appeal to a broader base of investors," Apple said. A lower stock price can make buying shares easier to stomach for investors.
While Apple has enacted stock splits, Amazon, which has seen its stock price rocket to above $3,000, has not done so in years. Some investors think a higher stock price attracts longer-term investors and discourages shorter-term traders, effectively reducing volatility.But with fractional share
One sizable effect of the
Because Apple's stock price will decline to about $100 from about $400 once the split is enacted, moves in Apple shares will have less of an effect on moves in the Dow.Apple is the highest-priced stock in the Dow, meaning a move in Apple has the biggest effect on a move in the Dow. Once Apple enacts its stock split, UnitedHealth will replace it as having the largest impact on the Dow.Advertisement
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