Apple's 7-for-1 Stock Split Is 'Very Unusual'

What will Steve Jobs think? Looks like Apple is managing their stocks more to managing the company at this moment…No?

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Apple Inc.AAPL -1.31% raised eyebrows Wednesday afternoon by announcing a 7-for-1 stock split along with its second-quarter earnings.
“A 7-for-1 is very unusual,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, wrote in a note. Within the S&P 500, he said, there have been only three splits since 1980 that were larger than Apple’s announced plan: Metromedia in 1983, Capital Cities/ABC in 1994, and MasterCardMA -1.57% earlier this year. All were 10-for-1 splits.
Splits don’t change anything fundamentally about a company or its valuation, although they have a history of generating a short-term pop in a company’s stock price. During the 1990s, companies that announced splits outperformed peers with similar stock profiles by 9% in the following year, according to a 2002 study conducted by David Ikenberry, dean of the University of Colorado’s business school.
At Wednesday’s closing price of $524.75, the split would price shares at $74.96 (dividing the current price by seven). That’s slightly below the $77.91 average price of the stock’s in the S&P 500.  Along those lines, that $74.96 price tag would make Apple shares the 13th lowest-priced stock if it were in the Dow Jones Industrial Average. It isn’t a blue-chip stock.
Trading will begin on a split-adjusted basis on June 9 for shareholders of record as of June 2.
In the 1990s, an average of 64 companies in the S&P 500 split their stocks each year, according to S&P. In 1997, there were 102 total stock splits.
But splits waned in popularity at the turn of the century, both before and after the financial crisis. From 2008 through 2013, only 12 S&P 500 companies, on average, split their stocks each year. There were 14 stock splits in 2013.
So far this year, four companies have split their stocks, including GoogleGOOGL -1.46% which completed its 2-for-1 stock split earlier this month.