Apple is the most expensive company in the world. At the end of July, the iPhone manufacturer announced a 4: 1 stock split. This will lead to a historic fall in price next Monday.
- Apple is the most expensive company in the world.
- A historic price crash threatens on Monday .
- The need Apple know Forex traders.
Munich - Long-time Apple shareholders have to be happy people. For example, if you bought the paper five years ago at the price of around 97 euros at the time, you can look forward to price gains of almost 350 percent. But on Monday Apple investors must have strong nerves. Then the announced share split will take effect and the Apple price will go on a dip. Why this is and what Apple shareholders need to know ..
Apple stock: why did Apple even announce a stock split?
The Apple stock is off to a soaring. Since the beginning of the year alone, the iPhone manufacturer's paper has increased by around 60 percent. The share is now trading at just under 427 euros. With the share split announced at the end of July, the share will soon be optically cheaper. The company, which is not only successful with the iPhone but also with the Apple Watch or the Apple Pay service, wants to become more attractive for small investors in particular.
How many stock splits has Apple done so far?
Apple split shares in 1987, 2000 and 2005, each in a ratio of 2: 1. In 2014 there was another split at a ratio of 7: 1. Apple went public in 1980. The issue price was then $ 22 per share. Converted to the previous splits, this corresponds to a price of $ 0.39 per share. Now Apple boss Tim Cook is planninga split in the ratio 4: 1.
Apple stock split: that's the schedule
What is the specific schedule for the planned split?
For all shareholders who had Apple shares in their custody account on August 24th (Monday), the shares will be split in a ratio of 4: 1. The corresponding deposit booking should take place on August 28th (Friday). All Apple shareholders will then receive three additional shares per share. The split comes into effect on August 31 (Monday).
What does that mean for Apple's share price?
Investors must be brave on August 31st. Then the Apple price is expected to crash by 75 percent. The good news is: Apple investors will not be poorer as a result. This is also shown by a simple example calculation. Let us assume that a shareholder had ten Apple shares in their custody account on August 24 and the price on that day would have been exactly 400 euros. Then the total value of the Apple position would be 4000 euros.
We also assume that the share price does not change until the split date. This means that a shareholder would have 40 (10 + 30) shares in their securities account at the split on August 28 The price per Apple share would be adjusted accordingly from 400 to 100 euros. The deposit value (40 times 100 euros) would remain the same. This also does not change the fundamental indicators such as the much-noticed price-earnings ratio (P / E) - i.e. how much investors are willing to pay for one euro or one dollar of profit.
Apple Shares Cross the $ 500 Mark Ahead of Stock Split https://t.co/akVa7ZSXWQ pic.twitter.com/uopxj35BlI
- Global Systems Mko (@Gsystemsmko) August 24, 2020Apple stock split: this is what shareholders need to pay attention to
What happens if a shareholder sells his shares after the cut-off date but before the split?
Then the corresponding Apple shares would also be split, but in the depository of the shareholder who acquired the share certificates after the reporting date. The previous owner, on the other hand, looks into the pipe.
When are the new shares in the portfolio?
The new papers are automatically posted to the securities account shortly after the split. Investors who had Apple securities in their portfolio on the reporting date, but who still do not have any additional shares in their portfolio a few days later, should contact their broker.