Apple is in for a busy day on the stock market as the popular stock is splitting 7-for-1.
During the most recent Apple earnings call, CEO Tim Cook announced that on June 9 the company would be splitting its stock, something it hasn’t done since 2005. Everyone who owned shares as of 5 p.m. Pacific on June 6 would receive seven shares for each one they owned, brining the price down to $92 a share.
For those of you unfamiliar with stock splits, this means now every time the stock goes up $1, it is a $7 gain for those who owned one share previous to the split as the increase is multiplied across their seven shares. So those who owned shares prior to today are going to be very happy as the stock price inevitably climbs.
Cook stated that the company was doing this an attempt to make the stock affordable to a wider range of customers, but it is also believed that it was done in order to try to get Apple included in the Dow Jones Industrial Average. It’s a badge of honor for any company to be included in the index as that is what determines the overall value of the stock market. With other tech companies such as Cisco, IBM, Intel and Microsoft already included in the average, it has to be something Apple would like to enjoy as well some day.
It should be interesting to see how the stock performs today. And to those of you who owned shares as of last Friday, congrats!