Apple Computer picks share split
US giant Apple Computer has announced a two-for-one share split as a result of its shares almost quadrupling in value over the last year.
This follows the success of its iPod music player, with sales accelerating after the introduction of cheaper versions of the music player.
The stock has been the best performer in the Nasdaq index over the past year. Splits do not change the value of stocks but can make a stock more attractive to small investors.
Share splits also suggest that management has confidence in a company's earnings prospects, which, inevitably, will result in another rise in its share price.
Too steep a share price, on the other hand, can trigger high performance expectations, leaving a company less room for disappointment.
Apple's last stock split took place in 2000, at the height of the technology boom. Before that it split its stock in 1987.
Over the last year, Apple's share price has gone from $23 to an all-time high of $81.99 per share reached on Wednesday.
Shares hit that high on news that Sirius Satellite Radio had held talks with Apple chief executive Steve Jobs about adding satellite-radio service to iPods.
Under the share split, Apple shareholders will receive one additional share for every outstanding share held, increasing the amount of Apple shares in circulation to 1.8 billion from 900 million.
Apple said trading on the split-adjusted basis will start on 28 February.
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