Apple Inc. (AAPL): What You Should Know About The Stock Split

share splitsDavid Zeiler: Now that the Apple Inc. (NASDAQ:AAPL) stock split (NASDAQ:AAPL) has arrived – today is the record date – investors need to know exactly what’s happening and how it will affect them.

Since the Cupertino, Calif.-based tech giant announced the 7-for-1 stock split on April 23, AAPL stock has gone up 18.5% to $630 a share.

A 7-for-1 stock split is fairly unusual, as most companies typically do a 2-for-1 or 3-for-1 split. But it appears Apple was determined to get the share price below $100.

The reason Apple Chief Executive Officer Tim Cook gave in April was that the company wanted to make AAPL stock “more affordable.”

Experienced investors know that the share price is irrelevant, but Cook realizes that a lower price at least makes a stock appear more affordable.

A more likely reason for the dramatic 7-for-1 split is that Cook wanted to get the price to where AAPL could reasonably be considered for inclusion in the Dow Jones Industrial Average.

Because the Dow is price-weighted, AAPL at $600 or $700 would distort the index. But AAPL at $90 or $100 would fit right in with other Dow components.

While being part of the Dow doesn’t affect revenue or profits, it does bestow a certain degree of prestige. And it could be that Cook feels Apple now deserves membership in that exclusive club.

So that’s the “why” behind the AAPL stock split. But there are a lot of other nitty-gritty details that investors should be aware of.

What You Should Know About the Apple Stock Split

First, let’s get the key dates out of the way.

  • The Record Date is June 2 – today. Investors who own AAPL shares as of today are entitled to receive the additional shares due to the split.
  • The Split Date is June 6 – Friday. AAPL share split after the market close.
  • The Ex Date is June 9 – next Monday. On this day AAPL common shares will start trading at the new split-adjusted price.

Here are a few other facts investors need to know…

The Share Price: If AAPL is still trading around $630 on the split date, it will open at $90 on the following Monday.

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