Apple Inc. Stock Split 'Welcomes Small Investors' as Shares Ride on WWDC Momentum
Apple Inc. has previously announced its 7-for-1 stock split in April in line with its plans to increase stock buybacks and boost dividend payments.
According to reports, the stock split is set after the close of the trading day on June 6. Apple had originally cited June 2 and June 9 but June 6 is the day the company's stock will split after the close of trading.
When trading resumes on June 9, all of Apple shares will be bought and traded with the new split-adjusted price. Shareholders will not have to do anything since the transition to a stock split is automatic.
Analysts said the stock split has "no material effect" on the actual value of Apple's shares since the stock split only "multiplies" the total number of outstanding shares by seven and divides the value of each stock by the same figure. The stock will have no net change in value.
The company had previously decided to go for a split so the stock will be more accessible to a greater number of investors. When a stock split occurs, smaller investors can trade their shares in smaller amounts rather than selling shares valued at about $645 per share. Reports said after shares are split, the stock will be valued at $92 each.
After the market close on June 6, shareholders will get six additional shares which will make their current holdings seven times more. The split will not allow Apple to hold an extended after-hours trading on the same day.
Analysts noted Apple can maintain its stock momentum by introducing a new product in the market or announce a new line of business.
Many analysts have raised their price targets for Apple shares with some as high as $700. Analysts said anything above $700 is significant. Apple's stock had reached $702 in September 2012, the highest on the company's record.
Analysts believed the momentum is on Apple's side as the company is fresh from its much-talked about Beats acquisition and its revelations in the Worldwide Developer's Conference.