The FINANCIAL - Apple announced 4 for 1 stock split

Apple announced 4 for 1 stock split

Apple announced 4 for 1 stock split

The FINANCIAL -- Apple announced financial results for its fiscal 2020 third quarter ended June 27, 2020. Company’s Board of Directors declared a cash dividend of $0.82 per share of the Company’s common stock. The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. This is the fifth stock split since Apple went public in 1980. The last split was in 2014.

The Company posted quarterly revenue of $59.7 billion, an increase of 11 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18 percent. International sales accounted for 60 percent of the quarter’s revenue.

The most difficult quarter since the Great Recession tested Apple’s DNA, and the company came out OK—far from unscathed, but tempered, in a position to become stronger. It may be fitting that last week was the 20th anniversary of the launch of one of Apple’s most famed failures: the G4 Cube. After Steve Jobs predicted that innovative product would change the world of computing, it stumbled badly with the market and was pulled off the shelves within a year, Forbes wrote.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. He also added that in uncertain times, this performance is a testament to the important role Apple's products play in customers’ lives and to company's relentless innovation.

Apple Inc. said Thursday that it will enact a 4-for-1 stock split, essentially giving investors three more shares for every one they own. Once nearly a given for most firms when their shares topped $100 or so, stock splits by companies in the S&P 500 faded from prominence after the dot-com bust in 2000. They are even more rare among companies in the Dow Jones Industrial Average. Apple is a component of both, according to The Wall Street Journal.

Stock splits are cosmetic, meaning they do not change anything about a company’s underlying fundamentals. They can lead to renewed interest from smaller investors by making the shares — which are now cheaper — more accessible. But that interest would not be enough to influence the share price more so than larger investors already freely trading the stock. In this case, all investors who currently own the stock will receive three additional shares after the market closes on August 24. With Apple’s shares trading around $400 in the after hours, the new price for holders will be around $100 when it begins trading on a split-adjusted basis on August 31, CNBC wrote.

This is the fifth stock split since Apple went public in 1980. The company previously did splits in 1987, 2000 and 2005. The 2014 move paved the way for Apple to be added to the Dow Jones Industrial Average, which due to its configuration tends to eschew high-priced shares. The move bucks a trend among big U.S. tech companies that have mostly refused to split their shares, resulting in sky-high prices. Alphabet Inc. stock costs more than $1,500, and Amazon.com Inc. trades above $3,000, effectively disqualify the companies from the Dow, Bloomberg reported.

Apple’s Board of Directors has also declared a cash dividend of $0.82 per share of the Company’s common stock. The dividend is payable on August 13, 2020 to shareholders of record as of the close of business on August 10, 2020.

Earlier this month, The General Court of the European Union issued its judgment in the Apple State Aid case annulling the European Commission Decision. In 2016 The European Commission concluded that Ireland granted undue tax benefits of up to €13 billion to Apple and it was illegal under EU state aid rules. The Irish government welcomed judgement by the General Court of the European Union and said that the correct amount of Irish tax was charged and that Ireland provided no State aid to Apple. Read more.

Tim Cook with Jeff Bezos of Amazon, Mark Zuckerberg of Facebook and Sundar Pichai of Google testified before Congress on July 29th to defend the size of their companies. Before the hearing started, President Trump tweeted on twitter: "If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders."  

Author: The FINANCIAL