Apple’s own app can’t understand its stock split
Apple has just finished its first stock split since 2005, and it's confusing more than just humans.
The company's own stocks app has been baffled, and reports that Apple has a market capitalisation of nearly $3.9 trillion.
The tech giant's value is actually closer to $560bn, around a seventh of what users of the iOS app will currently see.
Information about the split seems not to have been fed to the app, so it's reporting that the company has just jumped to seven times what it was worth last week, seemingly overnight.
Apple has split its stock three times before, in 1987, 2000, and 2005. Those three splits were all done on a 2-for-1 basis, but today's is a 7-for-1 stock split.
Six additional shares of stock have been issued for each share that already exists. Here's how Apple explains the procedure:
Let’s assume that as of the Record Date (June 2, 2014) an investor owns 100 shares of Apple common stock and that the market price of Apple stock is $490 per share, so that the investment in Apple is worth $49,000.
Let’s also assume that Apple’s stock price doesn’t move up or down between the Record Date and the time the split actually takes place.
Immediately after the split, the investor would own 700 shares of Apple stock, but the market price would be $70 per share instead of $490 per share. The investor’s total investment value in Apple would remain the same at $49,000 until the stock price moves up or down.
Here's how that faulty market capitalisation value looks to users:
