When Apple announced as part of its latest earnings report that it would split its stock four ways as of the end of August, the company said the stock split was meant to make the shares more "accessible" to investors.
Stock splits, which have become increasingly rare, at least in the tech industry, are "something that a lot of companies probably should do pretty regularly," according to Nasdaq Chief Economist Phil Mackintosh.
With a stock like Apple, which has quadrupled in price since the last time it was split in 2014, a split does indeed broaden the company's potential investor base, Mackintosh said. The move doesn't change the inherent market capitalization of the company — it simply makes it cheaper for investors to get a piece — particularly the retail investors and day traders who have been flooding the online trading platforms like Robinhood.
At $100 or so, which is roughly the price of a single share of Apple after a four-way split at its current price, "it's probably the perfect stock price" for Apple, Mackintosh said. The split will make the trading spreads tighter, which he said is likely to keep intraday volatility down and help the price continue to go up.
Still, as Mackintosh noted, retail investors should look at stock splits as a way to build positions in companies with strong fundamentals that might have otherwise been out of reach; they should not change the calculus about whether the stock itself is a good investment.
Skift airline reporter Meghna Maharishi breaks down how the government shutdown is hitting air traffic control—and what it means for travelers and flight safety
Aya Kantorovich, Co-CEO of August Digital, breaks down Bitcoin’s surge, crypto ETFs, institutional investment trends, and the future of safer crypto access.
Most members of the Federal Reserve’s interest-rate setting committee supported further reductions to its key interest rate this year, minutes from last month’s meeting showed.
Sinead O’Sullivan breaks down Taylor Swift’s genius marketing for The Life of a Showgirl, which just set the record for most albums sold in a single week.
Markets are emerging from a turbulent Q3. Horizon’s Mike Dickson shares insights on interest rates, small caps, and where investors should look in Q4 and beyond
