I just decided to buy myself 20 shares of Apple ($AAPL) stocks and 3 shares for each of my munchkins. A friend of mine, who knows investing is my passion, asked me my thoughts on the stock split last night and surprisingly I had none. You see, I hadn’t been paying attention to the news surrounding Apple and what the stock split really meant. Oh boy, but after I did my research (mandatory, you should never make a financial decision without doing your OWN research) I decided to dabble. My goal is to watch the stock’s progress and at least accumulate 100 shares of AAPL by year end.
So what does this stock split mean, why did it happen, and how can you get in on the action?
What is a stock split?
A company increases the amount of shares currently held by shareholders while simultaneously lowering the price per share. Splitting stock does not change anything about the foundation of a company and its value. In other words, the lower prices do not mean the company is not performing well. What it does is make the company more attractive to regular investors like you and I. Apple’s stock split comes just after they boldly acquired Beats By Dre. Exciting!
Who is affected by the split?
As mentioned before, the split affects stocks that are already owned by shareholders. So a person who already owned shares of APPL stock now own 7 shares for every 1 share they previously held. Current Apple owners still own the same amount of market share, while other investors, like myself, now have an easier time investing in the company.
But why though?
Apple is merely trying to reach a broader audience. Apple is trying to reach a new market, I mean at over $600 per share most of us just could not afford to participate prior to Monday. NOW this split makes Apple stock more appealing at under $100 per share.
Ladies, when the stock market opens at 9:30am this morning you may want to consider foregoing that new Celine bag and buying up some AAPL shares. Of course, do your own research but this split appears to be a good deal for all involved.
Until next time!
-YourFaveRPh
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