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Could AAPL split in a move toward Dow? Bernstein analyst thinks it will
A week after Apple posted its third-quarter earnings for 2012, Bernstein Research analyst A.M. "Toni" Sacconaghi speculates that the time is right for Apple to split its stock if it wants a future spot as an indexed member of the Dow Jones Industrial Average. The Dow is woefully underpopulated with technology companies, Sacconaghi argues, and IBM and Microsoft were added during a time when the PC market was far less mature than the smartphone market is now. But if Apple was to join the DJIA, the price of the stock would have to come down from the current $607 that it's trading at as of this morning. The Dow is a price-based index with few stocks selling more than $100 a share. Granted, this is speculation worthy of Chris Rawson's rumor roundups. Despite some headlines indicating that it's practically a done deal, Sacconaghi's scenario is just that -- a "what if" situation. As Barron's Tiernan Ray rightfully points out, Apple has not indicated that it has any current intention of splitting its shares -- although the company has done so three times before, most recently in 2005. The New York Times's DealBook blog is also considering Apple's fiscal future, pointing out a few possible big-game acquisition targets for the company's ample cash hoard. Writer Andrew Ross Sorkin saves the serious caveats for the end of the post (much of Apple's cash is overseas and cannot be repatriated without a tax hit, for example) after he speculates on some truly blue-sky options for Apple's shopping list. Twitter and Path? Nuance? Sprint? Research In Motion?!? Despite the reports of past talks between Apple and Twitter, none of these seem particularly likely. If we're throwing darts at the stock listings, though, perhaps Apple will fork over $68 billion and take over Comcast, which would gain it 51% of NBC Universal along with millions of paying cable customers. [via Reuters] #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; } #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Barron's: Apple should be in the Dow
Apple has been traded on the NASDAQ exchange since it first went public back in 1980. For most of that time, AAPL has been part of the NASDAQ 100 index, so a gain or loss by the company has an impact on the technology-oriented exchange. A post on Barron's today posits that Apple, which is now the world's most valuable company, should be part of the Dow Jones Industrial Average instead. However, Barron's thinks that it would be hard to admit Apple or Google to the Dow Jones index considering that the component companies are weighted on the price of their shares. Apple, which has been valued at $580 - $645 over the past few months, would simply "overwhelm" the index with a 26 percent weighting, almost double that of Dow component company IBM. Barron's notes that Apple's 9 percent jump in share price after the recent earnings call would have raised the DJIA a full 300 points. Barron's suggests that a different weighting, in which the weighting of any stock is capped at an fixed percentage, might be needed for companies like Apple and Google to become part of the Dow Jones Industrial Average.
AAPL declines again, S&P and Nasdaq see an impact
When it comes to stocks, Apple is an influencer and any changes in its stock price will affect US stock indexes. That's what happened on Monday when the Dow Jones Industrial Average surged and the NASDAQ and S&P fell because of Apple, says a report in Forbes. The NASDAQ and S&P both include Apple, and the company's five day decline is dragging the two indexes down. Apple's stock is now sitting at US$580.13, a 4.2 percent decline from its previous high of $610.28.
