Shares climb highest in two months
Apple investors have seen their share value shoot up by more than half this year. But if that isn’t enough, last night (July 31st 2012) it closed another 2.6 per cent higher on rumours the Cupertino, California-based company could split its stock and list on the Dow Jones index. Apple, the world’s biggest company, is currently the only one with a market cap in excess of $215 billion that is not included in the Dow.
That, and the fact it recently decided to pay investors their first dividend in 17 years, makes it all the more ripe for a Dow debut according to US research firm Sanford C. Bernstein & Co.
Earlier this year Apple dismissed rumours of a stock split, claiming that it didn’t see that it was in the best interest of shareholders.
But now Apple execs are thought to have had a change of heart and, if so, are thought likely to go a step further and join the elite on the 30-member Dow where tech firms are seen as under-represented and where there are currently only five - Cisco, HP, Microst, IBM and Intel.
In the past Dow has passed over both Apple and Google as their shares, both trading above $600, would command the biggest weightings and risk warping the index which values companies by share price, rather than capitalisation.
If listed on Dow, Apple alone would have three times the influence of IBM, which enjoys the largest weighting so far.
Dow, started in 1896 with just a select dozen members, is an exclusive club that only admits members with an “excellent” reputation and who can demonstrate sustained growth.
As a benchmark for the US economy, about $28 billion worth of products, such as exchanged-traded funds are linked to the index, and any ebbs and flows prompt money managers to buy or sell stocks to match the adjustments.
Though Apple declined to comment about the rumours of a listing or stock split, its shares still climbed the most in more than two months on New York trading.