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