Apple's stock price swells above stuttering Google
Somewhere, Steve Jobs is smiling
There used to be a running joke – and perhaps one with more than a little truth to it – that one of the reasons the late Steve Jobs didn't split Apple's fast-rising stock was that he wanted to someday see it pass Google in per-share price.
Had Apple's co-founder lived exactly six months longer, he would have seen that day come to pass: at the final bell on Thursday, Apple closed at $633.68, and Google at $632.32.
Well, the NASDAQ exchange upon which both companies trade doesn't actually have a bell – that's the New York Stock Exchange's tradition, it being physical and the NASDAQ being virtual – but you get the metaphor.
Apple and Google at close of trading on April 5, 2012
Despite lapping the Mountain View ad merchant – if only by a buck and change – Apple has a way to go to match Google's top selling price of $714.87 per share, which it reached on December 3, 2007.
On the other hand, Google's total market capitalization lags far behind that of its competitor a few miles down US Highway 280 in Cupertino. At $206.51bn, it's a mere 35.4 per cent of Cook and Co.'s $582.09bn valuation.
And about that stock split. Apple's stock has split two-for-one three times since the company was first traded: in June 1987, then June 2000, then February 2005. When the markets closed on the day of that last split, the new shares were worth $44.86. That's a hair over 7 per cent of what they're worth today.
Now that Jobs has shuffled off his mortal coil, things may be changing in how Apple views its shares and shareholders. CEO Tim Cook, for example, already made one major move that Jobs never countenanced: Cook – and his board of directors, of course – instituted a share buy-back and dividend program in mid-March.
If Apple's share price continues its meteoric rise – one analyst gave it a 12-month price target of $1,001 on Monday – a split may, indeed, be in the cards.
But should a split not be in the offing, not even the most fervid of fanboise would predict that Apple's stock price could ever overtake the cost of one share of Warren Buffett's Berkshire Hathaway Class A.
That high-priced spread closed on Thursday at $121,945 per share. ®
P/E ratio is the closest thing you get to a stupidity index. This is the ratio of stock price to profits earned. The normal range for this is 10-20. Above that tends to indicate overpriced stock (or optimistic buyers), below that indicates underpriced stock (or pessimistic buyers).
Guess what, Google's current P/E is 20.2, Apple's is 18. Who are the bigger idiots?
Oh for crying out loud
It was $500 only recently and AGAIN I decided I'd missed the boat on investing.
I could buy a single Apple share and it would pay for a new iPad in a fortnight, I want to get on the gravy train but surely this time it's maxed out. Right? Right?!
A bit daft...
The number of shares is perfectly arbitrary. They can not only split them to drop the per share value, they can also do a N-for-1 stock whatchamacallit to multiply the per share price up.
Aside from impressing the peasants and perhaps keeping out the riffraff, the per share price is a bit meaningless. It's daft to think it means anything unless and until it's multiplied by the number of shares.
They could just have one bigass $600B share, and then they could perhaps sell shares of the bigass share.