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Sat Jan 22 | 5 minute read
A stock split is when a company divides its the shares that exist currently into multiple shares.
For example, Let’s say a company has 100 shares out at $10 each (Total value $10,000), they do a stock split and now has 400 shares out at $2.50 each (All still worth $10,000).
Why do this? The value doesn’t change. Well, they do it to attract new investors. People are afraid of expensive stock. If you are selling at $400, many people will be put off by the high price, by lowering the price of each share the company hopes to bring in new investors.
Apple said in the release it approved the split to make “the stock more accessible to a broader base of investors.”
If you already have Apple stock, you will receive three additional shares after the market closes on August 24. With Apple’s shares trading around $400 at the time of this writing, the new price for holders will be around $100 when it begins trading on August 31, after the split.
I see this a a great buying opportunity. I am definitely in for 3 reasons:
Apple’s results on the last earnings call were very strong, according to CNBC.
Apple DEFINITELY is coming back in China. One of the worlds biggest economies.
And like we said before, with Apple being a household name and the new influx of Robinhood Millennial investors, The Lower Stock Price Will almost certainly Attract More Investors.
I am definitely watching and buying.