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Aug 1, 2020

What does Apple’s 1:4 split mean for the Dow Jones Index?

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What does Apple’s 1:4 split mean for the Dow Jones Index?

July 31, 2020, 14:30

Yingwei Financial – Apple (NASDAQ:) announced after the market on Thursday that it will split its shares at a ratio of 1:4, as an important constituent stock, this move is expected to have an impact on the Dow.

  • Apple’s stock split will affect the shareholders of record as of August 24. From August 31, Apple’s stock will be traded on an adjusted basis for the stock split. As of Thursday, Apple closed up 1.21% to $384.76.
  • Since the Dow is a price-weighted index, higher-priced stocks have a greater impact on the index’s intraday rise and fall. Therefore, the stock split at the end of next month will mean that Apple will become the 15th most influential component of the Dow. Or the 16th important constituent stock.
  • By the end of August, UnitedHealth Group (NYSE:), which closed on Thursday at $305.23, may replace Apple as the most influential component of the Dow; Home Depot (NYSE:) is currently the third most expensive component in the Dow. Shares, the closing price on Thursday was $266.31.
  • The stock split may cause the Dow and the trend to diverge further. Both the S&P 500 and the S&P 500 are weighted according to market capitalization. At present, Apple is the company with the largest market value, reaching $1.647 trillion. Microsoft (NASDAQ:) ranks second with $1.54 trillion, and Amazon (NASDAQ:) is $1.50 trillion, making it the third-largest company in the United States by market value.
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