investors who otherwise choose successful corporations to invest their money into. This is where the importance of the independent auditor’s letter becomes important. When a financial analyst is explaining how all these figures can impact an investor’s future, the auditor’s letter of opinion serves as a voice that states “these numbers are true”. 29
Part V: Press Release and Group Opinions 30
Press Release In more recent news, Tim Cook (current CEO) has confirmed that Apple Inc. will split its stock for the first time since 2005. This comes as a shock to shareholders as Apple has been talking about using $30 to buy back stock to become more appealing to investors. By choosing to split the stock in addition to buying back some of their own shares, Apple makes its shares more affordable to the general public and help return to and exceed their 52 week high. For this split, Apple is doing a seven for one split, meaning that for every share belonging to Apple now, will split into seven. For example, if an individual currently owns 100 shares of Apple stock, at the close of the split date, they will own 700 shares of stock. While this decision will reduce the current price a share of Apple stock is traded for, it makes the shares more affordable to a wider selection of shareholders. As reported in the article provided on the following page, an estimation reports that if the stock was currently priced at $524.75, the value of the stock after the split would be around $75. This will encourage new shareholders to own a part of Apple that otherwise might have been out of their price range. As a result of additional investment from new shareholders, Apple is expecting that this renewed interest in the company will help boost sales that have otherwise slowly declined or remained stable since Steve Job’s passing. Furthermore, investors feel that Apple has been slow to keep an edge over competitors like Samsung as well failed to create anything new and innovative. 31
Apple (AAPL) Increases Stock Buyback, Will Split Stock SAN FRANCISCO April 23, 2014 (AP) By MICHAEL LIEDTKE AP Technology Writer Apple is doling out more of its cash to shareholders and preparing to split its stock for the first time in nine years in an attempt to win back investors fretting about the iPhone maker's slowing sales growth and pace of innovation. The moves announced Wednesday as part of Apple's fiscal second-quarter earnings report are aimed at boosting the company's stock price, which has been hovering about 25 percent below the peak it reached in September 2012. The bellwether Standard & Poor's 500 has climbed by 28 percent during the same period. Apple Inc. earmarked an additional $30 billion for buying back its stock through next year, bringing the total to $90 billion during that time frame. The Cupertino, Calif., company also is raising its quarterly dividend 8 percent to $3.29 per share, up from $3.05 per share.