Just about a year ago I wrote a post explaining all the hoopla over an expected AAPL stock split which never happened. At that point AAPL shares were trading at $202.86 and many felt that it was just too expensive for most small investors to buy.
Last week, Apple closed at $348.14 after a few weeks of a roller coaster ride taking the stock down from a 52 week high of $364.90. No one really knows why the fairly quick drop happened. Rumors covered everything from the health of Steve Jobs and the question of a succession plan, to delays of the iPhone 5 and the iPad 2; but the fact of the matter is that an annual increase in price of around $145 ain't chopped liver.
The vast majority of AAPL stockholders are investment firms, with the little guy being mostly left out due to the high stock price. It's emotionally unsatisfying to buy a handful of shares, and with only five or six shares in your portfolio the profit potential is decreased. That's mostly emotions talking, but the market is strongly influenced by emotions like fear, excitement and greed. So what would happen if Apple decided to split its stock anywhere from two to one, up to a four to one split?
AAPL has split two for one three times, in 1987, 2000, and 2005 -- but it hasn't happened in the last six years. Philip Elmer-DeWitt writing for Fortune's Apple 2.0 posed an argument asking if the time is right. He made a reasoned case both for and against splitting.