Stock split rumor surfaces ahead of Apple investor meeting
New chatter from Wall Street suggests Apple may be planning a stock split, something it hasn't done since 2005.
At last year's annual shareholders meeting, Apple CEO Tim Cookof splitting Apple's then-soaring stock.
"A stock split isn't so clear to be honest," Cook told investors last February. Apple had charted out how stock splits worked for "many" other companies, Cook explained, and hadn't come up with a clear answer on what to do. "There might be a short-term pop, but for a lot it does nothing," Cook said.
A lot can change in a year though.
The day before, a simple tweet today from hedge fund manager Doug Kass suggested that Apple may have changed its tune.
"High above the Alps my Gnome is hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting," Kass tweeted, playfully referring to someone who may be a source at the company.
Shares of Apple have dropped more than 36 percent since reaching an all-time high in September. Right around the time of Kass' tweet, Apple's stock popped some, by about $8, and is now trading at $449.80, up 1.58 percent in midday trading.
In a follow-up tweet, Kass noted that the rumblings of a stock split have "been out for days, maybe weeks" and intensified with the oncoming shareholders meeting. He also put some cold water on the rumor, saying anything beyond a two-to-one split would require a shareholder vote, something that likely would have been on tomorrow's agenda if it were to happen.
Stock splits, especially on expensive shares, can make the stock more attractive to skittish investors. Companies can also do reverse stock splits that consolidate multiple shares into one. Neither move affects a company's market capitalization, which is the total value of issued shares -- an area where Apple remains the most valuable in the world.
Apple has, of course, split its stock before. The company did it in 1987, again in 2000, and one more time in 2005 when the stock was trading at $352. That's far fewer times than some other major tech companies, including Microsoft, Oracle, Cisco, and Dell.