You still have the same amount of money, it's just divided into more portions. FAANG name Apple, Inc (NASDAQ:AAPL) surprised investors in its July 30 earnings call announcing a four-for-one stock split. Apple Inc. (NASDAQ:AAPL) shares are scheduled to split before the market opens on Monday, August 31st. The tech titan's shares began trading at their new split-adjusted price Monday. So if you paid $400 per share for your Apple stock, your tax basis will be $100 per share after the split. Get … However, you shouldn't necessarily expect the new shares to show up at 4:01 p.m. EDT on Friday. That might make it sound as though a shareholder could sell their Apple shares after Aug. 24 and still be entitled to keep the extra shares from the split. Stock Splits After the Record Date . That's when trading in the shares on the stock market will reflect the post-split price. Those four shares are now worth one-quarter of the original share's price. It's a relatively painless process when a company splits its shares, but it's still important to have a good sense of what's going to happen along the way. So, while you’re now only receiving ¼ of the dividend, you have 4x the shares, so you’re effectively neutral. With all the hype about Apple's stock split, it'll be good to get the mechanics over with. Then, investors will be able to get back to paying more attention to Apple's fundamental growth prospects in evaluating what the next move is for the tech stock. In Apple's case, investors received three new shares for each share they owned. For instance, if a stock … Joe honed his investing skills as an analyst for Stock Advisor, Supernova, and Fool One. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Here's What You Need to Know. It set off another round of optimism that sent Apple's stock price above the $500 per share mark. He has split the stock twice and instituted a dividend. Had Apple never split the stock… As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. If you want to trade post-split shares, you'll have to wait until Aug. 31. But if a stock split doesn't change the value of a company, why has Apple's stock price run up so much ahead of its split and continues to rise after the split? Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. And in the months following the stock split, we can expect AAPL shares to receive $0.205 per share. Apple’s decision to do a 4-to-1 stock split was an attempt to increase demand for its shares. Returns as of 01/06/2021. Apple hasn't yet declared a dividend for the period after the split. Because it's a 4-for-1 split, the new price should be roughly a quarter of the old price. That means investors will … If Apple maintains its 21 cent a share dividend, that payment will be split evenly among the new shares. Specifically, you won't be taxed on the new shares you receive after the split. Cumulative Growth of a $10,000 Investment in Stock Advisor, Apple's Stock Split Today. However, what usually happens is that the per-share dividend payment gets adjusted to reflect it. For example, a 1000 share position pre-split, became a 2000 share position following the split. This occurs before the stock split, so you’ll get $3.20 per share you have now, not after the stock split in June. Yep. The move marks the first time in six years that the tech giant has split its shares. For each Apple share you owned prior to the split, you'll see a total of four shares after the stock split takes effect. Apple Inc. (NASDAQ: AAPL) broke the ranks this summer by announcing a four-for-one stock split.This was the first stock split since Apple’s seven-for-one stock split … Perhaps the biggest news of the report was … The official split date is on Friday, Aug. 28. He battle-tested his investment philosophy and strategies as portfolio manager of Tier 1, a market-crushing Motley Fool real-money portfolio that delivered 24.58% annualized returns during its existence. Tim Cook made Apple the stock of the decade by following some key trends. The Board of Directors has also approved a four-for-one stock split to make the stock more accessible to a broader base of investors. The dividend amount will also be divided by 7 going forward. For many investors, this will be the first time that they've dealt with a stock split. To answer this question, investors should shift their focus from the stock split to the true drivers of Apple's long-term value. Finally, the last date you need to know is Monday, Aug. 31. Say you own 100 shares of AAPL today. Put simply, if you place a trade anytime between now and close of business on Friday, Aug. 28, then you'll be trading the pre-split shares. After the close of business, shareholders will actually receive the extra shares in their brokerage accounts. Here's another way to think about it: A 4-for-1 stock split is like exchanging a $1 bill for four quarters. Following its 4-for-1 stock split, Apple's shares are now trading for roughly 75% less than they were before. As you'll see in more detail below, that's not the case. Stock Advisor launched in February of 2002. Whomever you sold those pre-split shares to will also get the additional shares. Prior to the stock split, shareholders will receive a quarterly cash dividend of $0.82 per share. This was a 2 for 1 split, meaning for each share of AAPL owned pre-split, the shareholder now owned 2 shares. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Market data powered by FactSet and Web Financial Group. This marks Apple’s fifth stock split in its time as a public company. Cumulative Growth of a $10,000 Investment in Stock Advisor, Apple's Stock Split: How Will It Actually Work? The stock split has no immediate tax consequences. Apple declared a dividend last week of $0.82 per share. But if a stock split doesn't change the value of a company, why has Apple's stock price run up so much ahead of its split and continues to rise after the split?. The company is aiming to make it easier for more investors to get in on the action with a stock split … The total value of the combined Apple shares before the split, therefore, would be $2,000. Apple shares have rallied about 25% since the company announced the split at the end of July. That way, the total dividend payment received will be the same for those who kept the four post-split shares. It follows a similar move Apple made in 2014, when it offered a 7-to-1 stock split. Another reason is that investors who could not afford to buy a share at $500 may now be able to buy one at $125. The fifth-generation wireless technology could help to spur hundreds of millions of device sales in the coming year, driving Apple's sales and profits sharply higher. Perhaps the best explanation is that professional traders know that many people do get excited about splits, and so they buy the stock ahead of what they expect will be a herd of individual investors rushing in to buy shares after the split is announced. Its stock, in turn, remains a buy post-split. So, if you owned one share of Apple worth roughly $500 on Friday, today you own four shares worth approximately $125. The iPhone giant announced after the market closed Thursday that its board approved a 4-for-1 stock split for every shareholder of record at the close of business on August 24. Apple has grown increasingly dominant, and its stock is soaring to new heights. That would make the next dividend about $0.21 … The last Apple (ticker: AAPL) split was 7-for-1, in June 2014. Aug. 13, 2020 9:47 AM ET Apple Inc. (AAPL) 178 Comments ... Unlock all Premium content and also get AAPL stock ratings. So for instance, Apple just paid an $0.82 per share quarterly dividend in early August. And nothing is more important for Apple in this regard than the iPhone. Shares of Apple's (NASDAQ:AAPL) stock are suddenly a whole lot more affordable. Apple Split Raises Dividend Question. Several analysts weighed in on … And in this regard, Apple's future is bright. Image source: Getty Images. Apple also has declared a cash dividend of $0.82 per share of the Company's common stock. At the time, Apple was trading above $600 per share. Apple (AAPL) has 5 splits in our Apple stock split history database. Market data powered by FactSet and Web Financial Group. So will owners of Apple stock before the 4-to-1 split have four times the amount of shares once the stock splits? Let’s also assume that Apple’s stock price doesn’t move up or down between the Record Date and the time the split actually takes place. Apple (NASDAQ:AAPL) recently announced that it will do a 4-for-1 stock split. It went public in December 1980. Apple's 4-for-1 split, which takes effect on Aug. 31, would drop its price to about $117 and boot its Dow ranking all the way down to 16th or 17th as the weighting plunges to just 3.1%. The dividend is payable on August 13, to shareholders of record as of the close of business on August 10. The split brought shares of Apple to about $92 a share. Please see the "Historical Prices" tab for adjusted price values. However, what usually happens is that the per-share dividend payment gets adjusted to reflect it. Said differently, it's possible that Apple's stock could surrender some of its recent gains now that the split has occurred. After the 4-for-1 split, it's likely that the company will declare next quarter's dividend in the amount of $0.205 per share -- one-fourth the size of the old dividend. If you sell the stock, you won't receive the extra shares after the split. This new dividend gives Apple an approximately 2.5 percent dividend. Of course, the stock price has also split by 4 and effectively the dividend has as well! It should continue the trend, rewarding long-time stockholders and more seasoned investors on the prowl for income. Profits are what ultimately determines a company's -- and, by extension, a stock's -- true value. Stock split history for Apple since 1980. Apple split each of its shares into four. The stock was up 2.6% to $128 on Monday. The newly created shares will be issued to shareholders after the closing bell on Friday, August 28th. The first split for AAPL took place on June 16, 1987. However, none of this alters Apple's long-term value, and so the effects can be fleeting. It's a fair question, and one with multiple answers. The split quartered Apple's stock price, which went from about $500 last week to … Now, Joe’s mission is to pass on what he’s learned -- and what he continues to learn -- as a contributing writer to Fool.com. Returns as of 01/06/2021. Apple investors need to understand three key dates associated with the split. Apple CFO Luca Maestri said on its third quarter earnings call that the split is intended to make Apple's stock "more accessible to a broader base of investors." The 4-1 split was announced on Thursday, July 30th. Apple hasn't yet declared a dividend for the period after the split. After the stock split, the dividend amount also will be divided by four. 4-for-1 Stock Split: July 30, 2020: August 10, 2020: August 13, 2020: $.82: Regular Cash: April … One reason is that less-experienced investors might not understand exactly how stock splits work and are simply excited about the chance to own more shares of Apple. It's understandable that you might have questions about how it works. Apple has split its stock four times in its history as a public company. But remember, each shareholder will have four shares for every share they used to own. Apple completed its fifth stock split on Monday, as investors received four shares for every one share held. As Apple itself described it, that's the date upon which the company "determine[d] which shareholders are entitled to receive additional shares due to the split.". There were 2-for-1 splits in February 2005, June 2000, and May 1987. That will make the total value of four new shares approximately equal to the value of one pre-split share. At the same time, Apple's stock price will be quartered, from about $400 now to about $100 when the split happens. Stock splits simply divide up a company into more pieces, with the value of each piece reduced in kind. What actually happened is that Apple did a 4:1 stock split, meaning that your 1 share of Apple stock has now split into 4 shares. A stock split is an action taken by a company to divide its existing shares into multiple shares. If you buy the stock, you'll be the one to receive the extra split shares in your account. Going forward, though, you'll want to remember that your cost basis on a per-share basis will also get reduced by the 4-for-1 split ratio. Apple conducted a seven-for-one split on June 9, 2014, and two-for-one splits … Apple recently made a shareholder friendly move by splitting its stock. After that, all trades will reflect the split. (Though this is less of a factor today, now that many brokers allow their customers to buy fractional shares.). Find the latest dividend history for Apple Inc. Common Stock (AAPL) at Nasdaq.com. Prices shown are actual historical values and are not adjusted for either splits or dividends. Immediately after the split, the investor would own 400 shares of Apple stock, but the market price would be $100 per share instead of $400 per share. If you then sell it for $125 per share, you'll have a $25 per share gain -- not bad based on the $400 you paid for pre-split shares. @themotleyfool #stocks $AAPL, Apple's stock price above the $500 per share, Apple just paid an $0.82 per share quarterly dividend, 3 Top Stocks to Recession-Proof Your Portfolio, 54% of Part-Time Workers Think Retirement Is Unrealistic for Them -- and They May Be Right, Dow Jones Tumbles to Start 2021; Apple Called Top FAANG Stock; Coca-Cola Stock Downgraded, Copyright, Trademark and Patent Information. Fortunately, the company appears to be gearing up for a 5G-driven sales bonanza for the newest version of its prized product. The dividend is payable on August 13, 2020 to shareholders of … Apple’s dividend will also be adjusted. He was late to the cloud but caught up. Stock Advisor launched in February of 2002. It's easy to get confused about what happens if you buy or sell shares between the record date and the split date. @themotleyfool #stocks $AAPL, 3 Top Stocks to Recession-Proof Your Portfolio, 54% of Part-Time Workers Think Retirement Is Unrealistic for Them -- and They May Be Right, Dow Jones Tumbles to Start 2021; Apple Called Top FAANG Stock; Coca-Cola Stock Downgraded, Copyright, Trademark and Patent Information. Dan Caplinger has been a contract writer for the Motley Fool since 2006. Read with Free Trial. Fortunately, understanding how it works is much simpler than understanding why it works that way. 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