Posted on 01 Aug 2020
Apple recently announced that they're splitting one share into 4 equal portions. People have said that this is "cosmetic" and increases the liquidity of the company, but what are thoughts from current investors and potential ones as well?
Bryan, Financial Analytics at Nanyang Technological University
Posted on 02 Aug 2020
A stock split is generally meant to increase the liqudity of share in the market.
Theoretically, a 4 for 1 stock split means the share price will be divided by 4.
Current investors will recieve 3 additional share for each share held by the shareholder.
Potential investors (who can only buy per on a unit basis) will be elated as this means that the stock price is now cheaper .
My personal thoughts are that this will be beneficial for AAPL's share price in the long run as this lowers the barrier of entry to investors who wants to scoop up more AAPL share. This trend was seen in June 2014 when AAPL executed a 7 for 1 stock split.
Write your thoughts