Slashdot Mirror
Apple Announces 2 for 1 Stock Split
neosar82 writes "Yahoo has a story about Apple's stock split. Apple Computer Inc. whose shares have almost quadrupled in value over the last year on the success of its iPod music player, on Friday said it set a 2-for-1 stock split, and its shares rose almost 4 percent. Under the share split, Apple shareholders of record at the close of business on Feb. 18 will receive one additional share for every outstanding share held. Apple said trading will begin on a split-adjusted basis on Feb. 28."
Sure - do you accept the Elbonian Eyecrud?
I, personally, would be buying some o' that fruity goodness right now... were it not for the fact that I'm broke. Worse yet, I'm broke in Australian Dollars.
Yet another piece of Apple I'm destined to drool over, but never own...
--- Egads, I glow in the dark!
...let's hope they don't find a worm inside.
Or even worse, half a worm.
(I know, I know, corny old joke... but I just couldn't resist!)
About 2-3 years ago I almost convinced myself that I should buy Apple stock. At that time, each share cost about 16 bucks...
I didn't buy any, thinking that I was maybe being a victim of St. Steve Job's reality distortion field (I'm as big an Apple fan as you can get) and that maybe the stock would plunge. After all, we were stuck with that damn G4. (And it kinda feels strange to buy stock when you're still in high school.)
Then iTunes Music store came out of nowhere. The stock litteraly exploded. Still didn't buy, thinking "economics 101: buying when high (the price, not me
Now the stock is at 81 dollars, that's a 65 $ increase per share, damnit. And yaknowhat? I still won't buy, cause I really don't see how it would rise again?! Maybe if Apple announces OS X for PC (see "Fortune" article). Maybe if they sell half a billion mac minis. Maybe if someone finds out that the iPod shuffle solves cancer, AIDS and world hunger. Maybe.
Anyways, it sort of confirms what I always thought about stock markets: those fucking "analysts" are on crack all the time. I mean, that Apple stock was vastly underrated three years ago. Now it's completely overrated, Apple is in good shape and all, but it's simply not that worth! There's no way in hell Apple is worth 72,9 BILLION dollars (900 million shares @ 81 dollars. I know, I'm vastly oversimplifying, but still...)
Hello! I'm a disaster waiting to happen!
Warren Buffett's Berkshire Hathaway has never split its stock, which is all you need to know about stock splits, AFAIC
True, but the price of Berkshire Hathaway stock is currently $91,000 per share.
While nice for the stockholders, I'd expect that to limit liquidity somewhat, because there just aren't as many people with funds to buy stock at $91,000/share. Today only 290 shares traded. 3 month average volume is 393 shares. (It'd probably be harder to make an option-based incentive program work with so few shares outstanding. And you can pretty much forget about non-executive employees having stock in the company.)
Like it or not, many (probably most) investors are not perfectly rational creatures. They'll buy a stock, after a split, because the share price drops into a range that they find attractive or accessible.
If someone would like to invest in Apple right now, they might not have $8,000 available to buy 100 shares. On February 28, they'll be able to buy 100 shares for $4000 or so, which perhaps they can afford.
Now, if you're Homo Economicus ( a runtlike feral creature recently discovered in fossils on an island in Southeast Asia) you understand that halving the price doesn't necessarily make Apple any better of a buy. It's not like a half-price sale.
But most people aren't that rational. They invest like it is a half-price sale. Never mind that you're getting half as much of Apple when you buy a share.
Splitting a stock helps companies take advantage of this kind of behavior. At a given price, there will be people who want to buy, but can't. Halve the price with a split, and those people will buy, unless the fundamentals are atrocious. If the company was good enough to buy, pre-split, but cost too much, they'll buy post-split, which helps drive the price up again.
There's a big psychological factor. It's also part of why companies occasionally do a reverse split, to raise the price of their stock. If a stock is down around $5 or less, like Sun's, it just looks like a loser, fading into inconsequence.
September 2011: Looking for Cocoa/iOS work in Boston area Cocoa Programmer Quincy, MA
That was about 3+ years ago, at one of Apple's low points. The stock has about quintipled ($10/80). OSX was so clearly in the right direction, albeit broken that it was indicitive of good things (iPod,Mini, Xserve clusters, etc.) of things to come.
There formula for success is the same as google's. Build an efficient user-experience over a solid backend.
I bought a powerbook and an ipod with apple's "cram and jam" program for college in the fall of '03. After one week of using it, I was convinced that I should buy some apple stock. I was amazed at how beautiful and powerful OS X was, and how easy to use the iPod was. I thouhgt that if Apple kept up the marketing, they could takeover the mp3 player market and make a dent in the laptop market I tired to convince my parents to give me some money to invest, but they thouhgt that they were already spending enough on my tution, plus my laptop. I think apple stock was in the high teens at that time. If i had gotten to put the grand I wanted to into apple, I would have enough money to buy myslef a dual g5. next time I have an inkling about a company with an awesome product, I'm jumping on it.
sorry 'bout the mess...
Obviously a mousebutton split is to follow. And Apple will never be the same. Mark my words.
This is...
O
U
T
R
A
G
E
O
U
S
!