Mac Lifestyle

It has been a little over two years since Apple stock last split. On Feburary 18, 2005 Apple stock was split in a two-to-one ratio increasing shares from 900 million to 1.8 billion and splitting stock value from $89.62 to $44.68. Since then the stock has more than doubled and is currently trading at $93.15.

According to Mac Rumors Apple is seriously considering another stock split which will decrease the price of the stock, but the number of shares will increase proportionately. Considering the current market value of Apple(AAPL) is at $93.15 (which is almost 4 dollars above the price Apple stock split in February 05) it is reasonable to take these rumors into careful consideration.

How Will the Apple Stock Split Affect You?

Companies often split their stock when they believe the price of their stock exceeds the amount smaller individual investors would be willing to pay for the stock. By reducing the price of the stock, companies try to make their stock more affordable to these investors. (SEC)

By lowering the price of the stocks and increasing trading volume, the market tends to produce many more “buys” for the given stock, which acts directly as a catalyst increasing the stock’s trading value over time.

This is great news for Apple stockholders especially since MSN stock analyst Jon Marksmen predicts Apple stock to double again by 2010. So lets say that you just bought 100 shares of Apple stock today at $93.15 per share. That comes to total value of $9,315. If a two-to-one split occurs, your stock will still be valued at $9,315 but you will own 200 shares at $46.57 instead of 100 shares at $93.15. Given the historical trend of stock splits generating more trading volume and buys, you will be increasing your earnings at a faster rate than you would have before the split (In theory of course).