What is a stock split and why does Apple need it?
A stock split is a method that allows companies to make their securities more attractive to investors by lowering their price and increasing the number of shares outstanding.
The logic is simple - a lower price will attract more investors, increase the liquidity of shares, and contribute to their growth. At the same time, a business split in itself does not affect fundamental indicators. At the end of July, Apple announced a 4:1 stock split. The Cupertino company will not issue new shares, just one security will split into several - for each share investors will receive three more. At the same time, the price of securities will decrease, and the number of shares in circulation will increase fourfold. The company's capitalization will remain unchanged, which means the share price will fall from approximately $400 to $100.
It is the $100 mark in the US that is considered comfortable for investors, and if a stock rises in price, this scares off many of them. A split here is a way to return shares to a price segment that is interesting to the mass investor. Apple is also included in the Dow Jones index, and the average price of shares of companies in it is approximately $130; the previous price of Apple shares stood out against this background.
Apple's capitalization fell by $180 billion
https://www.znak.com/2020-09-04/kapitalizaciya_apple_upala_na_180_milliardov 2020.09.04
Tech
Apple's capitalization fell by 8%, which means a loss of almost $180 billion. This is a record daily decline in value for any company in the history of the American market, Interfax reports, citing Barron's publication.
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Nevertheless, Apple's capitalization still significantly exceeds $2 trillion.
Without taking into account 2021, the previous anti-record was set by Facebook, whose market value in June 2021 fell by $119 billion in one session (shares fell by 19%) due to negative forecasts for financial performance amid the Cambridge Analytica scandal.
In addition, for a couple of days in March 2021, there was a daily drop in the capitalization of Apple and Microsoft Corp. exceeded $150 billion.
U.S. stocks ended sharply lower on Thursday amid the tech sector's biggest losses in months.
By the close of trading, the Dow Jones Industrial Average fell by 807.77 points (2.78%) to 28,292.73 points. The indicator showed the most significant one-day decline since June 11.
Standard & Poor's 500 fell 125.78 points (3.51%) to 3,455.06 points.
The Nasdaq Composite fell 598.34 points (4.96%) to 11,458.10 points.
“Stocks are down significantly on a percentage basis, particularly the technology sector, but this comes after a significant recent rally. The tech sector did not respond to fundamental factors for a long time,” Vital Knowledge expert Adam Crisafulli commented to CNBC.
A day earlier, the American stock market closed trading at record levels amid investors' hopes for progress in the development of tests and a vaccine against coronavirus infection.
“While we don't expect another crash anytime soon, we don't need new highs every day to support the uptrend,” said Frank Cappelleri, chief executive of Instinet.
Facebook shares fell 3.8%. The company announced that it will block new political advertising on its social network a week before the presidential election. Alphabet fell 5.1%, Amazon.com - 4.6%, Netflix - 4.9%, Microsoft - 6.2%.
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What does this all mean for investors?
The process of splitting shares will be carried out on August 24 - by this day the registration of shareholders who have the right to receive additional shares will end.
After this, the number of Apple shares in circulation will increase from 12.6 billion to 50.4 billion. At the same time, in addition to technical changes, analysts do not predict a strong impact of this step on investors. Securities will be more accessible to smaller investors, but the volume of trading in Apple shares is too large for such an influx to have a serious impact on stock prices.
As for dividends, Apple's board of directors approved the payment of $0.82 per share on August 13 - this will happen before the split. If the proportion of the split is transferred to dividends in the future, then payments per share will be four times less - a little more than $0.2.
At the same time, a split in the current situation shows the confidence of the company's management in the further growth of shares. This is a positive signal for the market.
Apple stock forecast
May 30. 2021 bullish performance for Apple shares is expected with an optimal forecast of 127.26 and daily volatility of 0.556%.
Pessimistic forecast: 126.99
Optimistic: 127.70
May 31. In 2021, bearish dynamics of Apple shares is expected with an optimal forecast of 126.92 and daily volatility of 0.667%.
Pessimistic forecast: 126.54
Optimistic: 127.39
On June 01, 2021, bullish performance of Apple shares is expected with an optimal forecast of 127.08 and daily volatility of 0.541%.
Pessimistic forecast: 126.83
Optimistic: 127.52
On June 02, 2021, Apple stock is expected to be bullish with an optimal forecast of 127.53 and daily volatility of 0.711%.
Pessimistic forecast: 127.05
Optimistic: 127.96
On June 03, 2021, Apple stock is expected to be bullish with an optimal forecast of 127.85 and daily volatility of 0.624%.
Pessimistic forecast: 127.36
Optimistic: 128.16
On June 04, 2021, bearish dynamics of Apple shares are expected with an optimal forecast of 127.72 and daily volatility of 0.437%.
Pessimistic forecast: 127.47
Optimistic: 128.03
On June 05, 2021, bearish dynamics of Apple shares are expected with an optimal forecast of 127.59 and daily volatility of 0.555%.
Pessimistic forecast: 127.26
Optimistic: 127.97
On June 06, 2021, Apple shares are expected to bearishly with an optimal forecast of 127.51 and daily volatility of 0.438%.
Pessimistic forecast: 127.21
Optimistic: 127.77
On June 07, 2021, the bullish performance of Apple shares is expected with an optimal forecast of 127.65 and daily volatility of 0.578%.
Pessimistic forecast: 127.26
Optimistic: 128.00
On June 08, 2021, Apple stock is expected to be bullish with an optimal forecast of 128.41 and daily volatility of 0.683%.
Pessimistic forecast: 128.03
Optimistic: 128.91
On June 09, 2021, Apple stock is expected to be bullish with an optimal forecast of 128.48 and daily volatility of 0.412%.
Pessimistic forecast: 128.23
Optimistic: 128.76
On June 10, 2021, Apple stock is expected to be bullish with an optimal forecast of 129.04 and daily volatility of 0.502%.
Pessimistic forecast: 128.71
Optimistic: 129.36
On June 11, 2021, Apple stock is expected to be bullish with an optimal forecast of 129.26 and daily volatility of 0.617%.
Pessimistic forecast: 128.77
Optimistic: 129.57
On June 12, 2021, Apple stock is expected to be bullish with an optimal forecast of 129.96 and daily volatility of 0.698%.
Pessimistic forecast: 129.47
Optimistic: 130.38
On June 13, 2021, Apple stock is expected to be bullish with an optimal forecast of 130.53 and daily volatility of 0.405%.
Pessimistic forecast: 130.26
Optimistic: 130.79
On June 14, 2021, Apple stock is expected to be bullish with an optimal forecast of 131.20 and daily volatility of 0.623%.
Pessimistic forecast: 130.76
Optimistic: 131.58
On June 15, 2021, Apple stock is expected to be bullish with an optimal forecast of 131.32 and daily volatility of 0.622%.
Pessimistic forecast: 131.00
Optimistic: 131.82
On June 16, 2021, Apple shares are expected to bearishly with an optimal forecast of 130.88 and daily volatility of 0.678%.
Pessimistic forecast: 130.41
Optimistic: 131.30
On June 17, 2021, Apple shares are expected to bearishly with an optimal forecast of 130.80 and daily volatility of 0.549%.
Pessimistic forecast: 130.45
Optimistic: 131.17
On June 18, 2021, Apple shares are expected to bearishly with an optimal forecast of 130.65 and daily volatility of 0.572%.
Pessimistic forecast: 130.39
Optimistic: 131.14
On June 19, 2021, Apple stock is expected to be bullish with an optimal forecast of 130.89 and daily volatility of 0.564%.
Pessimistic forecast: 130.51
Optimistic: 131.25
On June 20, 2021, Apple stock is expected to be bullish with an optimal forecast of 131.84 and daily volatility of 0.537%.
Pessimistic forecast: 131.52
Optimistic: 132.23
On June 21, 2021, Apple stock is expected to be bullish with an optimal forecast of 132.03 and daily volatility of 0.446%.
Pessimistic forecast: 131.70
Optimistic: 132.29
On June 22, 2021, Apple stock is expected to be bullish with an optimal forecast of 132.40 and daily volatility of 0.633%.
Pessimistic forecast: 131.92
Optimistic: 132.76
On June 23, 2021, Apple stock is expected to be bullish with an optimal forecast of 132.46 and daily volatility of 0.639%.
Pessimistic forecast: 132.07
Optimistic: 132.92
On June 24, 2021, Apple stock is expected to be bullish with an optimal forecast of 132.93 and daily volatility of 0.555%.
Pessimistic forecast: 132.48
Optimistic: 133.22
On June 25, 2021, Apple stock is expected to be bullish with an optimal forecast of 133.12 and daily volatility of 0.621%.
Pessimistic forecast: 132.73
Optimistic: 133.56
On June 26, 2021, Apple stock is expected to be bullish with an optimal forecast of 133.44 and daily volatility of 0.449%.
Pessimistic forecast: 133.09
Optimistic: 133.69
Not all companies use split
A stock split is a fairly common procedure for large publicly traded companies.
Only Apple has done it four times. The stock split was last 7 to 1 in June 2014. The use of this tool depends on the company's strategy. The same Amazon has not used splitting for more than 20 years. An opponent of this method is the famous investor Warren Buffett - shares of his Berkshire Hathaway holding have risen to more than $290 thousand per share since the 80s.
In Russia, shares of Apple and other American companies can be bought on the St. Petersburg Stock Exchange. To do this, you do not need to open an account with a foreign broker; a Russian account will be sufficient. You can open it online.
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