Apple by Marivic Cabural

Apple Inc. (NASDAQ:AAPL) will start trading below $100 per share on Monday as the tech giant’s highly-anticipated 7-for-1 stock split took effect after the market close today, June 6.

The iPhone and iPad maker’s stock price closed $645.57 per share. Following the stock split, it will be trading around $92.22 per share when the market opens on Monday. Shareholders who currently own a stake in Apple Inc (NASDAQ:AAPL) will receive additional 6 shares for every stock they held on record as of June 2.

The market value of the Cupertino-based giant and the amount of the investment of shareholders remain the same under the 7-for-1-stock split. Apple Inc. (NASDAQ:AAPL) just increased the numbers of shares issued to shareholders to significantly lower its stock price to encourage investments from individual investors.

Apple Inc. (NASDAQ:AAPL) is one of the most valuable companies worldwide with a market capitalization of around $556 billion. It is considered a blue chip stock, but it is not included in the blue-chip index—the Dow Jones Industrial Average (DJIA), which is also a price-weighted index. With a stock price nearly $700 a share, the iPhone and iPad maker will not have the opportunity to become part of the Dow 30.

With the stock split, Apple Inc. (NASDAQ:AAPL) now has the chance to be included in the Dow 30 given its sustained growth and it holds all of the requirements set by the index. “We cannot comment on the potential for any company to be added to or removed from our indices. We consider this material, market moving information,” according to the director and head of global communications of S&P Dow Jones Indices when asked by Street Insider in April.  Apple (NYSE:AAPL) is definitely a market moving stock.

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In a recent note to investors, Bernstein analyst Toni Sacconaghi implied that the stock split could widen retail interest for the shares of Apple Inc. (NASDAQ:AAPL), and it is also one of the reasons behind the price target increase to $700 a share. He also suggested the stock will rise easily (e.g., $90 to $100, vs. $625 to $700). Bernstein added, “Historically, our analysis points to evidence that companies that split their shares outperform in the near-term.”

Will you buy shares of Apple Inc. (NASDAQ:AAPL), now that the price is significantly cheaper?

About the author

Marie holds a Bachelors Degree in Mass Communication. She has an extensive experience in Journalism. Marie started in the industry in high school and her forte is news and editorial writing. She previously worked as a news writer and radio program producer at Nation Broadcasting Corporation (NBC) in the Philippines. She has also experience in advertising, events management, and marketing. She was a former Young Ambassador of Goodwill to the 26th Ship for Southeast Asian Youth Program (SSEAYP). She also writes for ICANNWiki, ValueWalk, and the The Motley Fool Blog Network. You can contact Marie [email protected]

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