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Apple Announces 4-for-1 Stock Split

By Eric Volkman - Jul 30, 2020 at 8:33PM

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This is hardly the first time the tech titan has made such a move.

Apple's (AAPL 2.62%) common shares are about to get significantly cheaper, but not because they're tanking. Concurrent with the release of its third-quarter fiscal 2020 results on Thursday, the tech giant announced that it will split that stock 4-for-1.

The company's board of directors approved the move, which will take effect on Aug. 31. Apple investors of record as of Aug. 24 will be given three additional shares for every share they hold on that date.

A knife placed below an apple cut into quarters.

Image source: Getty Images.

The company did not specify a reason or reasons for the split. Publicly traded companies tend to make such a move because their stock has become relatively expensive on a per-share basis; theoretically, a lower price can attract more budget-challenged investors. Apple's stock was trading at $384.76 per share at market close on Thursday.

It's important to note that straightforward splits do not change the inherent value of a stock. The total market capitalization remains the same; it's just spread among a higher number of shares.

This is not the first time Apple has cleaved its shares, although it isn't exactly a habit for the high-flying company. It enacted 2-for-1 splits three times -- in June 1987, June 2000, and February 2005 -- and a 7-for-1 split in June 2014.

It has been a busy week for the company. The day before the Q3 results were unveiled and the split announced, CEO Tim Cook fielded occasionally hostile questions from members of the House Judiciary Committee in a remote hearing on the tech industry's business practices. Also being grilled were Facebook's Mark Zuckerberg, Amazon.com chief Jeff Bezos, and Sundar Pichai, CEO of Google parent Alphabet.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Eric Volkman owns shares of Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Facebook and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$169.24 (2.62%) $4.32
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$119.70 (2.63%) $3.07
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$142.69 (3.53%) $4.86
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$178.34 (5.82%) $9.81
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$120.65 (2.68%) $3.15

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