Well, a stock split is very straightforward. All it means, in this case, is the price will be chopped in half to $224 and the shares outstanding will double. This doesn’t affect the market cap of Apple, or the value of your current shares. The whole point of doing this would be to allow more investors/traders to pick shares of Apple. The concept of stock splits is no revolutionary idea, they are just a way to create some buzz and allow more people to get their hands on the stock. But hey, when the stock is down 36% in 5 months, splitting the stock might not be that bad of an idea! Can I hear a 3-1 or 4-1 split?
Apples pile of cash is no secret to anyone, as it continues to grow as you read this. But what could they possibly do with $135 billion that could satisfy investors? Increase the yield? Sure, if you own 10 million shares and are seeing these payouts extremely beneficial to your pockets. But for the average investor/trader that is not the case. What would be beneficial is to actually do something with that money, such as innovate and buy up companies that bring value. I truly miss the days where Apple would come out with a breath taking product twice a year. Of course Steve Jobs is gone, but is the vision?! I don’t think so, but its clear an ‘X’ factor is missing.
The meeting tomorrow will hopefully clear the air for everyone, and I do expect Apple to announce a stock split. But, what truly matters here is if Tim Cook is focused on quieting the whining from investors, or, focused on getting that Apple mojo back during the Job days.
Author: Peter Nitso
pnitso@yahoo.com
Twitter: @PeterNitso
Paper bought 4050 LVLT June 27 Calls for $.25 (2.1 times usual volume) when stock was trading $20.12
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Paper bought 9855 VXX April 20 Puts for $.59 when stock was trading $24.76