I've read this entire thread once, then scanned it a second time for the word, "splits" - as of 124 comments, nobody has suggested a rational reason as to why Apple would split their stock. There were two implications of splitting the stock, one was that options plays (which normally trade in groups of 100, though some more expensive "minis" are also available) become more inexpensive, and some hand waving about "more people can afford the stock, therefore more demand, therefore greater impact on the price" - which I've heard for 20 years, and I believe has been fully debunked (the counter argument is that if the underlying stock has an actual value, and greater availability pushes stock above that value, then rational people can profit by shorting the stock/selling it until it reflects the actual value)<p>I'm always confused when an otherwise sane company starts playing with this type of financial engineering, the only people who really seem to profit will be the team who manages the split - and I often wonder whether a split is just some way of rewarding them with business, in return for some type of off books advantage.<p>Is there any other <i>rational</i> reason why a company might want to split? Does it give them some way of controlling their shares more effectively by splitting them -I.E. When the stock splits, do they get an enumeration of their shareholders that they might not otherwise have?<p>Anybody been involved in a stock split that can explain what the behind the scenes reasons totally not related to the "stock is cheaper so more people can buy it" excuse is?"
> <i>Apple will hit up the debt markets for more dollars, it being cheaper to use other’s domestic cash than its foreign reserves</i><p>Can anyone explain why this is so? Because they are somehow getting a higher interest rate return on their reserves then they'd have to pay to borrow? (That would seem pretty impossible). Because they'd have to pay taxes if they use the foreign reserves? Something else?
I wonder if there's a lagging indicator of tech bellwether decline in innovation/disruption when they introduce a dividend.<p>For example, Apple had a dividend in 1995. Then in 1996, Jobs came back and nixed it. Microsoft issued its first dividend in 2003. Cisco in 2011. Oracle in 2009.<p>As a former ibanker, I should be all for financial engineering. But when companies can do "actual" engineering, I'd prefer to spend money on growth if possible. If not... then, I guess the dividend makes sense, hence my earlier assumption.
I'm curious, but how would a company arrive at the number '7'? Is it somewhat arbitrary? Any reason you'd want it to be e.g. prime?
Can someone please explain this like I'm 5.<p>If I currently have 10 Apple shares, what will happen after the split?<p>Is the value of each share expected to go up or down as a result of this?<p>Would now be a good time to buy? ( or, at least, better than last week before this was announced?)
The only reason I can think of is to be listed in the Dow. Being too expensive is the reason it isn't in it yet. $75 is slightly below the current average Dow stock prices of $77, but should it double in price in the future, it still won't be too expensive for the Dow.
Question:<p>The split for existing shareholders is June 2nd.
The stock starts trading with split values June 9th.<p>What happens to trading from June 2nd-June 9th, during WWDC+ and after they announce their TV?
Without weighing in on why AAPL decided to split or whether it was a good idea, I'll say that I'm happy they did it. I make charitable gifts by donating appreciated stock (more tax-efficient than cash), and this split will allow me to make more granular donations than before. I don't always want to make donations in increments of $500.
Rather than pay a dividend, wouldn't it be better to take less margin on a low-end iPhone, iPad, or Mac to increase market share? The iPhone, for example, will always have a small global market share because they only sell high-end phones.<p>A phone that's $50 cheaper would translate in tens of millions of phones sold.
This is the last chance to get in before they release two more disruptive products.<p>Wearable + Television product.<p>Get in now. It's quite literally the surest bet in the market.
Do they save money on dividends if they have more shares because of rounding?<p>eg: let's say they have 100M shares and will pay US$ 2.15 per share. That's US$ 215M dollars paid.<p>Now they do a split and those 100M shares become 700M, dividend prices also are divided by 7 and become US$ 0.3071428571 per share, then they decide to round down to 30 cents per share.<p>It means they paid the same dividend as before but the total spent was US$ 210M<p>In other words they paid the same amount as before but rounding it down they saved 5M dollars or 2.3% of the money they could have spent otherwise.<p>If so this could also explain why 7. Since it's a prime number there are more chances that the division won't be round.
Isn't the goal of Apple's huge piles of cash to finance & consolidate their manufacturing as well as distribution? Could we interpret this as a signal that there aren't any new products coming down the line that would require such expenditures?<p>By new products I mean the release of a totally new line (e.g. iPhone 1) rather then an iteration upon a current line (e.g. iPad mini).
The stock is up 36 points or 7% in after-hours. I would be short. These moves from management reek of desperation and don't give me much confidence. They missed big on ipad sales
I'm close to piling on the anti-Tim Cook bandwagon. Everything he does seems to have no relation to product (buybacks, splits, dividends, environment, supply chain cleansing, repatriation taxes, etc.).