Apple Stock Splits

Summary: There have been rumours of a stock split of the apple stock however Apple didn't address speculation about a possible stock split at its annual shareholder meeting. There are many advantages to stock splits however they are getting rarer as stock splits are for companies which earn a lot such as apple, and it indicate bullish sign for the investors. Though stock splits are rare, they do come in time and we shouldn't use stock split as a reason to buy a stock, as it is unpredictable.

Why Interested: As apple is one of the large earning companies in the world, I would like to invest in its market in the coming future, therefore I should learn of its condition and news during the present. Furthermore, as a finance student, I would like to know more of how and why company would engage in stock splits.

Article: Investors follow the Cupertino, Calif., consumer electronics manufacturer's every move. As a result, rumors of a split, hitting the Internet late Tuesday, appeared to drive trading in the company's shares AAPL -0.98% . See: Apple buyers jump in after Doug Kass floats stock-split rumor. Such a split shouldn't, in and of itself, say anything about a company's fundamentals. If Apple had indeed declared, say, a two-for-one split, the value of its shares would drop from roughly $445 Wednesday morning to $222.50. Everybody who owns one share would now own two. Either way, Apple's overall market value would remain $422 billion or it would still hold $137 billion in cash on its books -- the real prize for investors.

So what's the big deal? Wall Street pros have long pointed to a couple of benefits of stock splits that have more do with perception than accounting -- but may be real nonetheless. The first has to do with price of the stock. While sporting a $445 share price doesn't make Apple more expensive than a company with a $45 share price, it certainly looks that way. Some experts think lower prices have greater curb appeal to small investors, one reason market experts say typical stock prices have stayed below $100 since the Great Depression.

It's not all about appearances, however. Stock splits may help small investors buy and sell more cheaply, too. Stocks typically trade in so-called round lots -- or groups of 100. When brokers have to split round lots, they can end up charging higher mark-ups to compensate for the inconvenience, meaning small investors looking to buy just 10 or 20 shares might be offered slightly higher prices than those buying 100 or 200. Indeed, Apple's share price is unusual, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Only 57 companies in the Standard & Poor's 500 have shares priced at more than $100, and only six, including tech rival Google GOOG +1.22% -- trading at about $800 -- are priced at more than $400.

Splits are getting rarer, too. The number of companies planning