Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

A man stands in front of a wall of iPhones cases in the new Apple flagship store on its opening day following an outbreak of the coronavirus disease (COVID-19) in Sanlitun in Beijing, China on July 17.

Thomas Peter/Reuters

Apple announced a stock split on Thursday and it may not bode well for future gains in the Dow Jones Industrial Average.

The iPhone maker made the surprise announcement in its quarterly report, saying it will split its stock four-to-one when trading opens on Aug. 31, Apple’s first share split since 2014.

Apple delivers blowout earnings amid COVID-19, market shrugs off iPhone delays

Stock splits have become rare on Wall Street in recent years, with just three S&P 500 members announcing splits in 2020, compared to an average of 10 a year over the past decade, according to S&P Dow Jones Indices.

Story continues below advertisement

Splitting their stocks is a way for companies to make it less expensive to buy individual shares, potentially attracting retail investors who make small trades.

Amazon’s shares cost $3,051 each, while an Alphabet share sells for $1,538 and Chipotle Mexican Grill’s shares cost $1,148.

With Apple’s stock surging 6% in extended trade to $408 following its strong quarterly report, the split means shareholders will receive three shares for every one that they own. Investors will be able to buy shares for closer to $100 each.

Apple said it hoped to make the shares “more accessible to a broader base of investors.”

However, brokerages increasingly let customers buy parts of shares, making the benefit of share splits less clear than in the past.

“Stock splits have become far and few between because people no longer care if it’s a $500 or $100 stock, because investors can now buy fractions of shares,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Splitting Apple’s shares means the Silicon Valley company will have less influence within the Dow, which is weighted to the price of the shares of its 30 components.

Story continues below advertisement

Apple was added to the Dow in 2015, and the 230% gain in Apple’s stock since then has been a major factor driving gains in the Dow, widely viewed as a reflection of the U.S. stock market.

Apple currently accounts for about 10% of the Dow, and after the share split, it will make up only a quarter of that, ranking it the 18th most heavily weighted stock in the Dow. Potential future gains and losses in Apple’s stock will have less influence in the Dow’s performance.

Apple’s stock split will not affect its weight within the S&P 500, which is based on market capitalization.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Follow related topics

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies