What You Need to Know About Apple’s 4 for 1 Stock Split

A look at Apple’s history, products, past stock splits, and future projection

Apple stock has been trending the past few days as the company announced a 4 for 1 stock split. You may not be sure what this means or if you should buy Apple stock today or after the stock splits. Let me briefly walk you through what is a stock split and some pros and cons of this split. Then you can decide for yourself if and when to buy Apple stock.

History of Apple

I’m sure you have heard of Apple. On April 1, 1976, Apple computers were created by Steve Wozniak, Ronald Wayne, and the late Steve Jobs. Jobs met Wozniak at a computer club in California. Both had a strong interest in computers as this technology was coming to market. Wozniak created the first prototype for a computer and Jobs encouraged Wozniak to sell the computer. The two along with Wayne went into business together forming Apple Computer Company. Wayne eventually left and sold his share of the company to Jobs for $800.

Since then the company has grown and became a trillion dollar company servicing people worldwide. Apple is a leading technology company and you may even own Apple products yourself.

Apple products

From the Apple computer, Apple emerged to add many different types of computers and other products that are used today. Apple created various versions of the Apple computer to the MacIntosh to the iMac and MacPro. Then they expanded to other areas as Apple created iTunes, iPhone, iPod, Apple Watch, iPad, Apple TV, and a few other products.

During the time Steve Jobs left and returned to the company, and his unfortunate death in 2011, Apple continues to be a strong technology company.

Apple’s past stock splits

Apple stock came onto market December 12, 1980, under the ticker symbol APPL. Since then Apple stock has split four times in its history. Historically, the stock priced has increased over time. Apple stock first split in June 1987 and rose 8% over the following 12 months. After the February 2005 split, Apple rose 54% over the following 12 months. Then Apple stock rose 38% after the most recent split in June 2014.

There is one instance when the stock dropped after a split and that was in June 2000 during the dot-com bubble. Apple stock dropped 60% over the next 12 months. Many technology stocks tumbled during this time period as many tech stocks were seen as overvalued.

Buy now or Buy later

To understand a stock split, you can compare splitting a $20 bill in four $5 bills. You still have $20 either as a $20 bill or with four $5 bills. Both dollar formations equal $20. The same is true with a stock split. You still have the same amount of stock.

If Apple stock is $400 when the stock splits, you’ll have three additional shares of Apple stock. So today you may not have $400 to buy Apple stock. If you have the money, then great. You can buy the stock. Apple stock is actually trading for $439.37 at the time of this writing.

Apple stock could be $400 when the stock splits. So Apple stock will trade for $100 after the split. If you don’t have $400 today, then you can wait until the stock splits and buy the stock for $100. Either way, you can buy the stock but it depends on the money you currently have available.

Apple’s expected return in 2020–21

Apple stock is having a great year which is why the company decided to create the 4 for 1 split. This also allows more people to own shares of this company. Apple shares were up 28% year to date heading into earnings.

Before the split, analysts expect Apple to reach the $520 price range by 2024. After the split, Apple stock should see approximately a 10% return.

My kid’s own Apple stock

Personally, I don’t own Apple stock but I did buy Apple stock for my kids after the last stock split in 2014. I bought shares of the stock for $91 when the stock split. This time I plan to buy shares for myself. This is not a recommendation for you to buy shares but to do your own research and due diligence.

Do you own Apple stock or plan to buy shares?

Tom Handy is a top Finance, Investment, Bitcoin, and Parenting writer on Medium, and the father of two kids. He retired from the Army and sits on several non-profit boards. You can find him on Twitter @tomhandy1.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.