The company is aiming to make it easier for more investors to get in on the action with a stock split … So will owners of Apple stock before the 4-to-1 split have four times the amount of shares once the stock splits? In Apple's case, investors received three new shares for each share they owned. 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 … At the same time, Apple's stock price will be quartered, from about $400 now to about $100 when the split happens. 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. However, what usually happens is that the per-share dividend payment gets adjusted to reflect it. It should continue the trend, rewarding long-time stockholders and more seasoned investors on the prowl for income. 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. If Apple maintains its 21 cent a share dividend, that payment will be split evenly among the new shares. And nothing is more important for Apple in this regard than the iPhone. If you sell the stock, you won't receive the extra shares after the split. 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. Stock splits simply divide up a company into more pieces, with the value of each piece reduced in kind. The split quartered Apple's stock price, which went from about $500 last week to … However, you shouldn't necessarily expect the new shares to show up at 4:01 p.m. EDT on Friday. 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. Apple declared a dividend last week of $0.82 per share. 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. 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. Yep. Stock Advisor launched in February of 2002. Tim Cook made Apple the stock of the decade by following some key trends. For example, a 1000 share position pre-split, became a 2000 share position following the split. The first split for AAPL took place on June 16, 1987. For many investors, this will be the first time that they've dealt with a stock split. A stock split is an action taken by a company to divide its existing shares into multiple shares. Perhaps the biggest news of the report was … So, while you’re now only receiving ¼ of the dividend, you have 4x the shares, so you’re effectively neutral. The total value of the combined Apple shares before the split, therefore, would be $2,000. The dividend amount will also be divided by 7 going forward. 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. He has split the stock twice and instituted a dividend. 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. Market data powered by FactSet and Web Financial Group. For each Apple share you owned prior to the split, you'll see a total of four shares after the stock split takes effect. One already happened on Monday, Aug. 24: the record date. 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. If you buy the stock, you'll be the one to receive the extra split shares in your account. As you'll see in more detail below, that's not the case. It follows a similar move Apple made in 2014, when it offered a 7-to-1 stock split. Returns as of 01/06/2021. Joe honed his investing skills as an analyst for Stock Advisor, Supernova, and Fool One. So if you paid $400 per share for your Apple stock, your tax basis will be $100 per share after the split. And in this regard, Apple's future is bright. 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%. Shares of Apple's (NASDAQ:AAPL) stock are suddenly a whole lot more affordable. 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. 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." That way, the total dividend payment received will be the same for those who kept the four post-split shares. The last Apple (ticker: AAPL) split was 7-for-1, in June 2014. 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? After the stock split, the dividend amount also will be divided by four. Please see the "Historical Prices" tab for adjusted price values. This was a 2 for 1 split, meaning for each share of AAPL owned pre-split, the shareholder now owned 2 shares. 4-for-1 Stock Split: July 30, 2020: August 10, 2020: August 13, 2020: $.82: Regular Cash: April … After the close of business, shareholders will actually receive the extra shares in their brokerage accounts. Image source: Getty Images. 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. Another reason is that investors who could not afford to buy a share at $500 may now be able to buy one at $125. Here's another way to think about it: A 4-for-1 stock split is like exchanging a $1 bill for four quarters. Profits are what ultimately determines a company's -- and, by extension, a stock's -- true value. 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. 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. Cumulative Growth of a $10,000 Investment in Stock Advisor, Apple's Stock Split: How Will It Actually Work? The stock was up 2.6% to $128 on Monday. Say you own 100 shares of AAPL today. Apple completed its fifth stock split on Monday, as investors received four shares for every one share held. Read with Free Trial. Those four shares are now worth one-quarter of the original share's price. Apple (NASDAQ:AAPL) recently announced that it will do a 4-for-1 stock split. The official split date is on Friday, Aug. 28. The move marks the first time in six years that the tech giant has split its shares. So, if you owned one share of Apple worth roughly $500 on Friday, today you own four shares worth approximately $125. However, what usually happens is that the per-share dividend payment gets adjusted to reflect it. Following its 4-for-1 stock split, Apple's shares are now trading for roughly 75% less than they were before. Stock Advisor launched in February of 2002. 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.". Apple’s dividend will also be adjusted. Prior to the stock split, shareholders will receive a quarterly cash dividend of $0.82 per share. If you want to trade post-split shares, you'll have to wait until Aug. 31. Apple has grown increasingly dominant, and its stock is soaring to new heights. Said differently, it's possible that Apple's stock could surrender some of its recent gains now that the split has occurred. Had Apple never split the stock… The 4-1 split was announced on Thursday, July 30th. Find the latest dividend history for Apple Inc. 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