Key Highlights
- Apple announced its fifth stock split on Thursday in the ratio of 4:1.
- For every one share owned, investors would receive 3 additional shares.
- The stock price which is $400 currently would be divided into four, bringing it near to $100
- The stock split is mainly for appealing to the broader base of investors.
- Last stock split happened in 2014 in the ratio of 7:1
On Thursday, Apple the well known American MNC has proclaimed that the company’s Board of Directors has approved for a stock split where the existing shares are divided into multiple shares in the ratio of 4:1. The stock split creates no impact on Apple’s underlying fundamentals or market value but will make the shares much cheaper making them more accessible for investors.
For the investors who currently own the shares, each share will turn into four shares after the market closes on August 24. Currently, the company’s shares are trading around $400. The latest price for investors will be around $100 when it starts trading on a split-adjusted basis on August 31.
Apple says the stock split would allow the company to reach a wide range of investors who found it difficult to buy the stock currently. Also, as on August 24, the investors who own the shares would get three additional shares for every one share they have and the price of the stock would bring closer to $100. This will be the fifth stock split in the history of Apple.
The most recent stock split happened in 2014 when it enacted a 7:1 split as its share price reached $700. This enabled it for consideration and ultimately add to the Dow Jones Industrial Average.
The 30-stock index is price-weighted, meaning that the impact of a company’s change in share price is determined by how much shares trade for. The change in the stock price of Apple might create a big effect on change in the Dow Jones Industrial Average as Apple is currently having the highest-priced stock in the index.
