Today watching Bloomberg TV I was listening to one of those talking head experts mention that one of the reasons for AAPL bull bias lately was due to the split announcement. Effectively allowing investors with smaller accounts to buy a piece of the company. My question is simple, what has prevented the same investors from buying 50, 25, 10, even 5 shares of the company at current prices? I don't see the logic, and since no one in my household speaks "market" I thought I would ask here.
I do believe during the dot-com bubble, stock splits were followed by a nominal increase in price. I feel like I read a paper about this, maybe someone else can substantiate..
They are targeting investors with less than 600 to invest in aapl. If you have a 5000 account, how much aapl will you buy at 600/ share?
Well it is ONE of the four reasons: 1) Great earnings report 2) 7 for 1 stock split News 3) 12 Billion buy back 4) Speculation that the 7 for 1 stock split suggests AAPL will be added to the Dow Regarding number 3, AAPL is borrowing against the money held outside the country and buys back shares. In effect, bringing the money back without paying taxes on it.
I understand why it went up, that's not the illogical part, I was mostly questioning the reasons the guy on TV was giving for how it would now be open to smaller investors. I guess they were referring to investors willing to invest less than 600 dollars on AAPL, which is about the same price of an iPAD, somethings even less.
Do you ever think there is collusion driving Apple's price up? Not complaining here, I made some nice coin with the Weekly Apple Calls. The price action seem's strange now that we have did our 7 for 1 Spit. I think a lot of Shorts plus Retailers and their massive Buy Back has bullied us towards the $700 mark. You think Carlos Ichan has dumped any of his shares? Carl knows when the party is over (Not counting NUAN and EBAY, maybe FDO?). The talking heads were saying Twitter was going to go below $30 on Fast Money, Today they said some Option buying of $50 Calls has them going Long. What is their purpose? They said Apple was high at $500, $600 and now their saying we are going to $700, I don't understand the Fast Money and Wall Street Analysts who finally upgrade Apple after it's moved $200 a share.
If you keep thinking about this statement , write down all the reasons why they would do this, the light will switch on.