What is a two-for-one stock split and what does it mean for my existing shares?

A two-for-one stock split means that for every share of Apple common stock you own, you will receive an additional share. Effectively, your total number of shares will double. However, the total value of your investment will remain the same immediately after the split, as the price per share will be halved.

When will the stock split take effect?

The stock split is for shareholders of record as of the close of business on February 18, 2005. Trading on a split-adjusted basis will begin on February 28, 2005. This means that purchases and sales on or after February 28 will be at the new, lower price reflecting the split.

Why is Apple conducting a stock split?

Stock splits are often implemented to make the stock price more affordable and accessible to a wider range of investors, potentially increasing trading liquidity. It can also be seen as a signal of management's confidence in the company's future growth and financial health, as it anticipates the stock price will continue to rise.

Will the stock split affect the company's market capitalization or my investment's total value?

Immediately after the split, the company's total market capitalization will remain the same. Similarly, the total value of your investment will not change instantaneously because while you will have twice as many shares, each share will be worth half its pre-split price. The split is primarily an administrative adjustment to share count and price.

AAPL 8-K SEC Disclosure

Summary

Apple Computer, Inc. announced a significant corporate action: a two-for-one stock split approved by its Board of Directors. This move, effective for shareholders of record as of February 18, 2005, will double the number of outstanding common shares, with trading on a split-adjusted basis commencing February 28, 2005. The company also proportionally increased its authorized common shares from 900 million to 1.8 billion to accommodate the split. This stock split is generally viewed positively by investors as it can increase the stock's liquidity and make it more accessible to a broader range of investors by lowering the per-share price. For Apple, this action signals confidence from management in the company's future prospects and its ability to sustain or grow its share price post-split. Investors should note the record and effective dates for the split to understand their holdings post-adjustment.

Key Highlights

1Apple Computer, Inc. announced a two-for-one stock split.
2The Board of Directors has approved the stock split.
3Shareholders of record on February 18, 2005, will receive one additional share for each share held.
4Trading on a split-adjusted basis is expected to begin on February 28, 2005.
5The number of authorized common shares has been increased from 900 million to 1.8 billion.

Apple Inc. 8-K Report, Corporate Update (Feb 11, 2005)

Summary

Key Highlights

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