Apple announced a 4-to-1 stock split on its earnings day. Not a surprise, the decision made the headlines. The Street’s Kaitlin O’Toole asked me a question about it last week. I explained that the split has no economic impact on shareholders. Therefore, doing it theoretically adds no value to investors.
But there is a psychological component to consider: potential investors may be lured by the idea of owning more of a good company at “a discount”. There may also be a bias that a stock that once traded at $400/share should see those price levels once again in the future.
Watch the video for more information on Apple’s stock split.
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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)