Original title: split shares for 4 times in history! Apple Inc's share price has soared nearly 4%. Can you still buy it now? Source: Tencent US stocks
Tencent Securities, Aug. 31, Apple Inc (NASDAQ:AAPL) shares have performed well in trading so far this year, and Monday's plan to split four shares is expected to make the world's largest company by market capitalization more attractive to retail investors. However, judging from the limited history of Apple Inc's stock split, there is no reason to be in a hurry to buy shares with reduced prices.
The tech giant has been so hot that it became the first company with a market capitalization of $2 trillion in early August, trading at more than $500 a share. Apple Inc's share price has risen about 70 per cent so far this year.
As of press time, Apple Inc's shares rose 3.7% to $129.45 in early trading on Monday in the u.s. stock market.
This stock split is the fifth split since Apple Inc's listing. The previous four stock splits are as follows:
June 9, 2014: one share is split into seven shares
February 28, 2005: one share is divided into two shares
June 21, 2000: 1 share split 2 shares
June 16, 1987: 1 share split 2 shares
Although the split aims to reduce the nominal price of each share, the Apple Inc stock adjusted by the split has a history of short-term selling.
Apple Inc's share price fell an average of 5.6% in the two weeks after the previous split, and has fallen in each of the previous four splits, according to Kensho, a hedge fund trading information platform. That underperformed the Dow Jones Industrial average: two weeks after Apple Inc split, the index tended to be 50-50, barely rising on average, and showed a downward trend twice after four splits.
In the case of Apple Inc's split, what people on Wall Street say most often is that it will encourage new investors to buy its shares.
Jim Cramer, a well-known US host and stock market commentator, said Apple Inc split his shares to make his shares more affordable to retail investors, and referred to a conversation between him and Tim Cook, chief executive of Apple Inc.
Tim told me last night, 'Hey, I want more people to buy our stock.' " Kramer said on July 31.
Although Apple Inc's shares only began trading on an adjusted split basis on Monday, the iPhone maker announced plans for a 1:4 split when it released its third-quarter results in late July.
Apple Inc is not the only company to split shares so far this year: Tesla, Inc. (NASDAQ:TSLA) also announced a stock split plan and began trading on Monday on a post-split basis.
To be clear, split shares will not change the fundamentals of a company. While lower-priced stocks can attract small investors, large investors who are already trading their shares can still have more influence on share price movements. In addition, the overall market environment is also the key, Apple Inc before the split after the trading have been affected by the overall environment.
Sam Stovall, chief investment strategist at CFRA, recently pointed out that Apple Inc's share price, which was last split in 2014, rose 36 per cent over the following year, but Apple Inc's share price plummeted 60 per cent after the tech bubble burst in 2000. Apple Inc's share price has risen more than 30 per cent since the latest split plan was announced in late July.
Stovall expects that Apple Inc's share split will help keep its share price rising. "I think we will still be bathed in the light of the Fed's loose policy," he said. and it will be easier for retail investors to buy Apple Inc shares. "
One of the reasons Wall Street bulls are bullish on Apple Inc's long-term prospects is that they believe the company's business fundamentals are improving. Daniel Ives (Daniel Ives), an analyst at Wade Bush Securities, recently raised Apple Inc's target price to $600 from $515, citing the impending "supercycle" of iPhone 12-about 350 million of the world's 950 million iPhone are expected to be upgraded in the next 12 to 18 months. (nebula)