Investors watched Apple stock hit all new highs of $101.09 on Wednesday, August 20. In case you’re surprised by this seemingly low figure, don’t forget that Apple’s stock split seven to one in early June, opening at $92. The company hasn’t gone through a split in nine years, and the seven to one split has been unprecedented. The second-highest price occurred in September 2012 when AAPL hit over $705 pre-split, amounting to $100.72 in post-split prices. These exciting developments are likely due to upcoming announcements regarding the newest generation iPhone model.
Upcoming Product Announcements
The pre-launch spikes for Apple stock are nothing new. The tech industry, investors, and hundreds of publications wait in anticipation before the news becomes official. A large Apple media event is scheduled for September 9. The upcoming hardware and operating system changes will determine the course of several different industries, including app development and mobile accessories. But investors must brace themselves for the possible stock drop after the product announcement. Don’t forget how the stock dropped after the iPhone 4 was formally introduced to the public. However, analysts are used to seeing these sharp fluctuations before and after Apple media events, so long-term investors have little to worry about.
The Benefits of the Split Stock
Investors who managed to secure Apple stock before the split occurred find themselves with seven times the amount of stock ownership they previously had. Before the split, dividends per share were at $3.29, which has since dropped down to $0.47 per share post-split. However, as the stock prices continue to rise, long-term shareholders will continue to reap the benefits. In August 2014, Apple paid out $2.9 billion in dividends to their investors.
So why did Apple decide to pursue a stock split in the first place? According to their official Investor Relations webpage, the company wanted “Apple stock to be more accessible to a larger number of investors.” This brought the prices down from an astronomical $645 to just $95 per share. Many current investors took this as an opportunity to snag additional Apple stock, while many new investors entered the foray.
Growth Hinged on Innovation
Apple’s stock prices have continued to be a sensitive antennae tuned toward continued product innovation and retail success. Investors should keep an eye on quarterly earnings reports and official product launch news to get an idea of how prices will fluctuate. Even when Apple stock sinks to surprising lows, such as the prices experienced in April 2013, the prices have continued to rise sharply to hit record-breaking highs. It’s possible that the upcoming news will have the potential to push these records beyond anything analysts have seen before.
Investors who own Apple stock have signed up for a wild ride, as rumors, product launches, and developers conferences continue to influence prices and trade. Based on historical trends, it is likely that the prices will continue to rise up until the iPhone 6 media event. Long-time Apple investors are reaping the benefits of the stock split, while the prices have dropped low enough to become accessible to new investors.