Needs to bring more liquidity to its share price
Investors will be looking ahead to the AGM of Californian giant Apple later today [27th February 2013] to see if there is any announcement on a stock split, as wildly rumoured on social networking sites. Though Apple’s share price is well below its record high of more than $700 achieved in September, its current price of around $449 is still a tad too high for many investors who are loathe to tie up so much cash in a single stock.
If the company’s executives do vote to split it, perhaps offering two for every one share, it will bring liquidity into the market while also making it more difficult for a rival to contemplate a takeover – not that that’s likely to happen in the near future.
The Cupertino manufacturer would also be able to continue to increase its dividends at a comfortable rate while share buybacks could be made easier.
Apple has so far declined to comment on the rumours but if it does opt for a split it won’t be the first time.
It has done two-for-one stock splits three times in its history, the most recent coming in February 2005.