Apple Stock Jumps on Rumors of Stock Split at Tomorrow's Shareholder Meeting

Hedge fund manager Doug Kass tweeted (via 9to5Mac) a short time ago that he is hearing rumors of an announcement regarding a stock split coming at Apple's shareholder meeting scheduled for tomorrow at the company's headquarters in Cupertino, California. The stock has reversed course since Kass's Tweet, moving from down $5 to up $5.

Many observers, such as Fortune's Philip Elmer-Dewitt, are calling into question Kass's statements, noting the sequence of events that saw him announce a large position in Apple, float the rumor of a stock split, and then announce that he was selling off shares after the stock spiked. Kass has, however, defended his Tweet, saying that the rumors were "all over the Street".

aapl_split_rumor
While a stock split would not add any intrinsic value to Apple's market value, some have viewed a potential split as a positive for Apple under the perception that a company is more likely to split when it is confident that the stock price will rise in the future. Observers have also argued that high stock prices for companies like Apple and Google have kept them from being added to the Dow Jones Industrial Average given the outsized impact they would have on the price-weighted index.

Apple's last stock split came in February 2005, a 2-for-1 move that brought the price of a single share down to just under $45. Apple has refrained from splitting its stock since that time, with investors seeing the share price rise to over $700 before pulling back to the current level around $450.

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Top Rated Comments

deadwalrus Avatar
168 months ago
If they split it I'm buying it.

In that case I'll sell you 4 quarters for a dollar. All day long. LET'S DO THIS.
Score: 12 Votes (Like | Disagree)
d0mth0ma5 Avatar
168 months ago
How is that not stock price manipulation?
Score: 11 Votes (Like | Disagree)
DipDog3 Avatar
168 months ago
1. Buy a lot of AAPL shares at a low price.
2. Tweet about a stock split rumor.
3. AAPL's price goes up.
4. Sell shares & PROFIT!!!!

Why didn't I think of that???
Score: 7 Votes (Like | Disagree)
Avatar74 Avatar
168 months ago
Some people can't afford $450-$700 a share as an investment.
What does that mean, exactly?

Are they not able to buy half the shares at 500 that they would buy at 250 and encounter basically the same result? Does mathematics and physics work differently on their planet?

-or-

Do they not have so much as $500 to their name, in which case they probably shouldn't be trading securities at all.

Proper portfolio allocation and sector diversification isn't really achieved if you have less than $100,000 in funds to invest. If you are in that situation, you're better off participating in an index fund and sitting on it, not just because of risk mitigation (fractionalizing your investment across hundreds of stocks to reduce risk exposure), but also because index fund managers have almost no expense and most indexes tend to consistently outperform the handful of securities that amateurs might be likely to pick. Why play with individual securities if you can sit on an index fund and earn a better return over time?

You're not better off if Apple decides to dilute its per share value because that has no effect on the earnings results of the company.... Buying 20 shares of Apple at $250 is of no additional benefit to you than buying 10 shares of Apple at $500...
Score: 5 Votes (Like | Disagree)
Peace Avatar
168 months ago
If they split it I'm buying it.
Score: 5 Votes (Like | Disagree)
somethingelsefl Avatar
168 months ago
An Apple split? I thought it was a banana split.

I'll be here all week, folks.
Score: 4 Votes (Like | Disagree)