Apple aims to bring its shares to a broader investor base by dividing the shares in four ways.
The iPhone giant announced the move in its third-quarter earnings release, saying trading will start in a split fashion on August 31, 2020. Depending on how the stocks perform from time to time, the split stocks could be worth roughly $ 100 each. .
Apple shares rose 6% after trading hours on Thursday after closing at $ 384.76.
This is Apple’s first stock split since 2014. Since it was made public in 1980, Apple’s shares have been split four times since the company went public. It split on a 2-for-1 basis in 1987, 2000, and 2005, and a seven-to-one basis in June 2014. Apple’s stock has appreciated about 320% since its last stock split.
The division “definitely helps equity liquidity and attracts new investors,” said Angelo Zino of CFRA.
Apple Chief Financial Officer Luca Maestri said in his third-quarter earnings call that the division aims to make Apple’s shares “more accessible to a broader investor base.”
Additionally, Apple’s board of directors declared a cash dividend of $ 0.82 per share on its common stock, payable on August 13.
For the overall quarter, Apple easily beat earnings estimates, reporting 18% EPS growth to $ 2.58 and 11% revenue growth to $ 59.7 billion, despite a difficult quarter due to COVID-19. .
Apple management set the bar for a better-than-expected sales recovery in May and June, healthy iPhone SE sales, strong demand for iPads and Macs, and the impact of government stimuli worldwide.
The company did not provide specific tax guidance for the September quarter, but said its next iPhone line will arrive “a few weeks” later than last year. Apple’s iPhone 11 went on sale on September 20, 2019.
Apple shares rose 28% year-to-date to earnings.
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