Analyst: Here’s Why Apple Needs A Stock Split

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

Split AppleAfter the buzz of a possible stock-split announcement from Apple (NASDAQ:AAPL) at its annual shareholders meeting on Wednesday gathered momentum, the company’s share price saw a big jump. On Tuesday afternoon, shares recovered 1.6 percent after having touched $437.66 intraday to close at $449.80.

Oracle Investment Research analyst Laurence Isaac Balter immediately picked up on the idea, which was first mentioned by hedge fund manager Doug Kass in a tweet. Isaac Balter wrote in a research note that a stock split was a much better plan than the preferred stock option currently being promoted by Greenlight Capital’s David Einhorn.

Is Apple now a once-in-a-decade buying opportunity? Click here to get your 24-page Ultimate Cheat Sheet to Apple’s Stock now!

“With all due respect to Mr. Einhorn, I do not see how bleeding Apple’s cash flow to support anyone but those domiciled in the Cayman Islands with a tax-free dividend into perpetuity (and a 10 percent tax equivalent yield) [works],” Isaac Balter wrote. And while Apple was certainly still cheap, the “average American retail investor doesn’t buy P/E ratios”, he added. “They buy (or sell) share price action.”

A better idea would be to offer a 10-for-1 stock split, which would also give shareholders, and consequently shares, a psychological lift…

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business