Stock splits can stir up a lot of investor excitement. Apple (AAPL -0.57%) is a perfect example. Since the tech hardware leader went public more than 40 years ago, Apple has split its shares five times and created massive shareholder wealth.
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Apple’s stock split history
Apple’s stock split history
Apple is one of the most valuable companies in the world, with a current market cap of more than $2.9 trillion.
It had its initial public offering (IPO) on Dec. 12, 1980. The IPO price was $22, or $0.10 per share, when adjusting for the five stock splits it has initiated in its history as a public company.
Some investors get excited about stock splits because they believe they make the stock cheaper. A stock split is the result of the company issuing new shares, so as a result, the price of each share goes down.
A multiplying or dividing of a company's outstanding share count that doesn't change its overall market value or capitalization.
But the valuation usually remains unchanged since the decrease in stock price and increase in shares outstanding usually offset each other. There's no change to a company’s market capitalization or enterprise value.
Nevertheless, some investors think the split results in increased investor attention and causes the share price to rise before and after a stock split. Here’s what Apple’s history tells us regarding this belief.
Apple stock splits: 1980 to 2023
Apple stock splits: 1980 to 2023
Apple has endured some tumultuous times, especially in its first two decades as a publicly traded stock. For the 20 years after its 1980 IPO, the share price only doubled in value through Dec. 31, 2000.
Source: The Motley Fool.
Much like the stock splits in Apple’s early history, the company’s stock splits in the 2000s and later were preceded by a run-up in stock price. Performance in the year after the split was respectable, too. After another 2-for-1 split in 2005, Apple divided its last two splits by a much greater amount in 2014 and 2020.
Data sources: Apple and YCharts. | Stock Split Date | Stock Split | Apple Market Cap | Stock One Year % Return Prior to Split | Stock One Year % Return After Split |
|---|
| June 16, 1987 | 2-for-1 | $5 billion | 131% | 7% |
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| June 21, 2000 | 2-for-1 | $18 billion | 140% | -60% |
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| Feb. 28, 2005 | 2-for-1 | $37 billion | 275% | 53% |
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| June 9, 2014 | 7-for-1 | $565 billion | 49% | 36% |
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| Aug. 28, 2020 | 4-for-1 | $2.1 trillion | 139% | 19% |
|---|
Lessons from Apple’s stock split history
Lessons from Apple’s stock split history
Apple’s history of stock splits shows that the hype leading up to the new shares being doled out to shareholders is greater than the event itself. Apple’s share price performance in the year after a split is a bit more of a mixed bag.
However, more important than Apple’s stock splits is the business’s performance. In each of the five times that the tech hardware designer has split its stock, it experienced strong growth in sales and profitability. The exception was in 2000, when sales dipped between the dot-com bust and the release of the iPod in 2002.
The lesson: Companies such as Apple split their stocks for good reasons, which include managing stock-based compensation for employees and share repurchase programs to return excess cash to shareholders. However, as exciting as stock splits may seem, the real reason to buy and hold a stock like Apple for the long term is because of secular growth trends that benefit the company.
Adam Levy has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
FAQs
Apple's stock has split five times since the company went public. The stock split on a 4-for-1 basis on August 28, 2020, a 7-for-1 basis on June 9, 2014, and split on a 2-for-1 basis on February 28, 2005, June 21, 2000, and June 16, 1987.
How many times has Apple done a stock split? ›
Apple's stock has split five times since the company went public. The stock split on a 4-for-1 basis on August 28, 2020, a 7-for-1 basis on June 9, 2014, and split on a 2-for-1 basis on February 28, 2005, June 21, 2000, and June 16, 1987.
How much is $10,000 invested in Apple 20 years ago? ›
Those gains translate to a 36.6% compound annual growth rate for Apple compared to a 7.4% CAGR for the S&P 500 in that time. That means that $10,000 in AAPL stock purchased 20 years ago would be worth about $5.08 million today, assuming reinvested dividends.
Will Apple stock go up in 2024? ›
Apple stock is a "top pick" for 2024 and has potential upside of 36% as it gears up for the launch of an AI-enabled iPhone, according to Bank of America.
How much will Apple stock be worth in 10 years? ›
Apple long term stock forecast is anticipated to be $315 in 2025, $370 in 2026, $425 in 2027, $465 in 2028, and $480 in 2029. In 2030, analysts anticipate Apple shares will be worth $510.
Do stocks always go up after split? ›
From time to time, stock splits are followed by a bump in stock performance—but not always. Is the split worth it? – Stock splits have no tangible impact on a company's total value—they simply create more shares at more affordable prices.
Do stocks grow after split? ›
Stock splits neither add nor subtract fundamental value. The split increases the number of shares outstanding, but the company's overall value does not change. Immediately following the split the share price will proportionately adjust downward to reflect the company's market capitalization.
How often do stocks go up after a split? ›
A stock split does not change the value of a stock because it does not change the fundamentals or growth prospects of the underlying company.
At what price did Buffett buy Apple? ›
The bet on Apple and CEO Tim Cook has paid off handsomely for Buffett, who said in 2022 that the cost of Berkshire's Apple stake was only $31 billion.
What year did Warren Buffett buy Apple stock? ›
Buffett made waves in the investment world when Berkshire first bought Apple stock in Q1 2016, and then continued and even accelerated his buying throughout 2016 and into 2017.
These three are gigantic trillion-dollar companies today, but they weren't always that large. Apple debuted on the public markets in 1980. If you invested $1,000 in the company, then your investment would now be worth nearly $1.5 million.
Is Apple a buy or sell in 2024? ›
With its 3-star rating, we believe Apple's stock is fairly valued compared with our long-term fair value estimate of $160 per share. Our valuation implies a fiscal 2024 adjusted price/earnings multiple of 25 times, a fiscal 2024 enterprise value/sales multiple of 7 times, and a fiscal 2024 free cash flow yield of 4%.
Is Apple a buy or sell right now? ›
Apple's analyst rating consensus is a Moderate Buy. This is based on the ratings of 31 Wall Streets Analysts.
How many times has Amazon stock split? ›
Amazon (NASDAQ: AMZN) has had four stock splits since its initial public offering in 1997, with its most recent one occurring in June 2022 in a 20-to-one split. The company has enjoyed immense success over the years by leading two crucial sectors: e-commerce and cloud computing.
How many times has Microsoft stock split? ›
Key Points. Microsoft's long history includes nine stock splits, and with its current AI-driven growth, another might be on the horizon.
What if I invested in Apple in 1997? ›
If you had invested $1,000 in Apple stock on Feb. 4, 1997, today, you would have $1,343,269. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $11,038. A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $6,140.
What was the price of Apple before the split? ›
Before Apple split, its share price of $503 as of August 24 made it the Dow's largest constituent. [i] After the split and the reshuffle, Apple fell to the middle of the pack, greatly reducing its influence on the index's return—even as its influence on cap-weighted indexes didn't waver.
