The Apple Stock Split: What Investors Need to Know (AAPL)

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NOTE: This story was updated with fresh information June 9.

Now that the Apple stock split (Nasdaq: AAPL) has arrived – today (Monday) is the first day it trades at its new price – investors need to know exactly what's happening and how it will affect them.

Since the Cupertino, Calif.-based tech giant announced the 7-for-1 stock split on April 23, AAPL stock has gone up 18.5%. The split-adjusted AAPL price is about $92.50.

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A 7-for-1 stock split is fairly unusual, as most companies typically do a 2-for-1 or 3-for-1 split. But it appears Apple was determined to get the share price below $100.

The reason Apple Chief Executive Officer Tim Cook gave in April was that the company wanted to make AAPL stock "more affordable."

Experienced investors know that the share price is irrelevant, but Cook realizes that a lower price at least makes a stock appear more affordable.

A more likely reason for the dramatic 7-for-1 split is that Cook wanted to get the price to where AAPL could reasonably be considered for inclusion in the Dow Jones Industrial Average.

Because the Dow is price-weighted, AAPL at $600 or $700 would have distorted the index. But AAPL at $90 or $100 would fit right in with other Dow components.

While being part of the Dow doesn't affect revenue or profits, it does bestow a certain degree of prestige. And it could be that Cook feels Apple now deserves membership in that exclusive club.

So that's the "why" behind the AAPL stock split. But there are a lot of other nitty-gritty details that investors should be aware of.

What You Should Know About the Apple Stock Split

First, let's get the key dates out of the way.

  • The Record Date was June 2. Investors who owned AAPL shares as of this date are entitled to receive the additional shares due to the split.
  • The Split Date was June 6. The AAPL shares split after the market close.
  • The Ex Date is June 9 – today. AAPL common shares start trading at the new split-adjusted price.

Here are a few other facts investors need to know…

Join the conversation. Click here to jump to comments…

  1. LJ | June 2, 2014

    The statement, "The Record Date is June 2 – today. Investors who own AAPL shares as of today are entitled to receive the additional shares due to the split." implies that if I buy AAPL on 6/3-6/6, I will lose 6/7th's of my investment come Monday, June 9th.

    If that statement were true, who would by AAPL stock prior to Monday the 9th?

    • David Zeiler | June 2, 2014

      LJ, I know it seems that way, but anyone who buys AAPL in that window will indeed get the benefit of the split, just a few days later after the trade has been processed.

      -Dave Zeiler

  2. Natala | June 3, 2014

    It means record date is June 2nd…….What happend if we buy the AAPL stock in between 6/3 – 6/6.
    Can any one give me some Idea.

    Natala

    • jim | June 3, 2014

      What happend if we buy the AAPL stock in between 6/3 – 6/6.

      Natala, nothing happens. If you buy 1 share of AAPL tomorrow, Wednesday the 4th, you'll own 1 share of Apple, which will split to 7 shares on Monday.

      If you buy shares on or after the Record Date but before the Ex Date, you will purchase the shares at the pre-split price and will receive (or your brokerage account will be credited with) the shares purchased. Following the split, you will receive (or your brokerage account will be credited with) the additional shares resulting from the stock split.

  3. MS | June 3, 2014

    ^How so? Can you explain further?

    Thanks

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