Apple’s decision to split its shares was made to help make investors more accessible, CNBC’s Jim Cramer said Friday, referring to a conversation he had with its CEO, Tim Cook.
“I think Apple is making the right decision. Tim said to me last night, ‘Hey, I want more people in the bag,'” Cramer said in “Squawk Box.” “These other companies should also do that.”
The iPhone maker, which reported an 11% sales increase in its last quarter, also announced Thursday that it would do a four-for-one stock split in late August.
Apple shareholders will receive three additional shares at the close of business on August 24. Apple was trading around $ 407 on Friday morning, meaning investors could buy shares of around $ 102 when the shares start trading in a split fashion. 31.
Apple has also done this several times in the past, most recently in 2014 when it did a seven-to-one stock split. Apple was trading north at $ 600 a share.
A stock split doesn’t alter a company’s fundamentals, Cramer explained in “Squawk on the Street.” But Cramer said it can make a stock more attractive to retail investors who can avoid investing in a company due to a high price, something like a label shock to stocks.
“The idea that he wants more people in his actions is refreshing,” Cramer said of Apple’s Cook. “He doesn’t play with hedge funds. He plays with people who buy the product and have a 99% satisfaction rate. That’s what he plays for.”
The “Mad Money” host said other companies don’t seem to put as much emphasis on accessibility for retail investors as Amazon. E-commerce and the cloud giant were trading around $ 3,200 a share, based on pre-market moves.
“Apple cares about the little one. Amazon is not focused on that. They are focused on delivering the goods to the little one,” Cramer said.
Disclosure: Cramer’s charitable trust owns shares of Apple and Amazon.
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