How would you like to own a slice of the Apple pie? What once seemed impossible is now doable.
On Monday, June 9, Apple announced a stock split to bring the company’s expensive shares down substantially in price. One share of Apple will go from $647 to about $93. Fox10News spoke with a financial adviser at Edward Jones in Mobile to find out what’s the impact for consumers.
“Companies will have different reasons for a split. But often times when the price is high, they often split and that bring the price down in order to be attractive to average investors,” explained Cheryl McCormick-Hann, financial adviser.
People who have already invested in the tech giant won’t lose any money; they’ll be given additional shares to make up the difference.
Apple just struck a $3 billion deal to buy headphone maker Beats Electronics and previewed its latest software for iPhones, iPads and Mac computers. But is this the right investment for new investors?
“What I say to my clients…given their goals, their objectives, their risk tolerance, what they already have in their portfolio, and they’re age…I think that I think depending on those parameters that technology is an appropriate investment,” said McCormick-Hann.
The company’s stock doesn’t lose any value; the cheaper shares each just represent a smaller piece of the company. In this tech savvy age there are a number of ways to get into the stock market area online. If you’re think about it, McCormick-Hann suggests making the sale in person rather than opting for something online.
“Every client is different, and we feel the financial advice should be related to specific clients goal, objective, their risk tolerance and of course their age.”
Apple has completed 2-for-1 splits on three previous occasions: May 1987, June 2000 and February 2005. The stock rose 2 percent in the first year after the 1987 split and surged by 60 percent in the first year after the 2005 split. The shares plunged 57 percent in the first year after the 2000 split, which occurred amid a steep downturn in technology stocks.