As Apple Stock Gets Sliced, It's Not Time for Investors to Split

NEW YORK (TheStreet) -- One of the most highly anticipated events on the market finally arrives.

When the market opens this morning, shares of Apple (AAPL)AAPL, which closed Friday at $645.57, will begin trading at $92.22 as a result of the company's 7-for-1 stock split, announced in April.

Since the announcement, Apple's stock has been on an incredible run, soaring 24% and netting new 52-week highs seemingly in every session. The shares are up 16% year to date. But since reaching its 52-week low of $388.87 last June, Apple stock has surged more than 66%.

In an appearance on CNBC on Friday, Mark Newton, chief technical analyst at Greywolf Execution Partners, said that Apple's stock has gotten to a "nosebleed level." He added, "I don't think the stock can make much progress before it pulls back." Investors want to know how much further the shares can run.


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Depending on sentiment, the shares will begin trading at their split-adjusted price above or below $92.22. Apple management, and in particular CEO Tim Cook, has been very clear about wanting the stock to become more accessible to a larger number of investors. Newton is likely underestimating the power of psychology.

A lower share may entice more buying among would-be investors who prefer a larger number of shares. And if those would-be investors were unwilling to shell out the cash for stock trading at $645, Apple at $92 will appear more affordable. It's not just about the psychological effect, however. There's a precedent here as well.

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