Fruity inventor of rounded rectangles Apple split its stock and appears surprised that the cocaine nose jobs of Wall Street is greeting the news with a loud yawn.
On Monday, Apple put into effect a 7-for-1 stock split which created more shares for a lower price in an attempt to bring in more investors.
Apple stock (AAPL), which was trading at $646 on Friday, hovered over $93 per share midday Monday. The Tame Apple press rushed to say that Apple was still one of the most valuable companies in the world and all was well with the universe.
Now the numbers of shares have gone from 1.8 billion to 12.6 billion. Apple said it wanted its stock to be more accessible to a larger number of investors. By lowering the price of each share, smaller investors can begin to see Apple stock as a possible investment.
But Wall Street appears to disagree. Peter Cohan, adjunct professor at Babson College warned that it was a cheap trick particularly as the company is not making more money than it has in recent years.
“The stock split is a cheap trick that isn’t in-line with Apple’s values– to create a great product and charge a premium for it.”
Alex Gauna of JMP Securities said that Apple was not inspiring enough confidence when it comes to product innovation , and investors should wait to see what we get from the iPhone 6 refresh before buying.That could be worrying for Apple. The iPhone6 is hardly likely to come up with anything that has not been done by Samsung or its rivals. After all there is only so much you can do with a Smartphone and it has largely been done already.
It means that if Apple’s iPhone6 is not a winner the company could go the way of Blackberry rather more sharpish than I predicted.