Apple's Seven-for-One Split Goes Into Effect

The tech giant's stock value has gone up since announcing the stock split.
4:16 | 06/09/14

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Transcript for Apple's Seven-for-One Split Goes Into Effect
And as Wall -- -- -- on this Monday June 9 again that's certainly -- story stocks would -- a look at the latest offering from apple. Which happens to be a slimmed down version of apple the tech giants haven't for one stock split went into effect -- -- to explain what it means and why it matters -- -- -- -- finance. So what -- present -- a stock split is. Sure -- stock -- is essentially. A move that a company makes to divide its shares. Into smaller pieces in this case apple decided to make each one of its shares. Equivalent to seven new shares if you owned a share of apple on Friday today you -- seven shares its not really an economic event you actually should in theory. -- the same exact proportional piece of the company it should be like as they say cutting the same size pizza into sixteen slices that an eight. That being said sometimes it has psychological effect some investors like the idea of a somewhat more. Affordable share price at least have a cosmetic basis -- with -- -- and apple certainly seems to have -- couple -- movement. We'll break out of some of the numbers and what was the share before the 71 split. Friday close at 645. Dollars and 57 cents so this morning that was the equivalent of a little more than 92 dollars per share that's the new stock price and was up today at more than a percent and a half approaching 94 dollars per share so essentially. You know you've got me some 100 dollar. Share price out -- something that was our -- 650 on Friday OK so what was the response from Wall Street or -- retail investors. -- they liked -- at least you know we don't really know if the stock was -- truly specifically and only because of the stock split but since they announced this politically a couple of months ago this the stock's been up -- nicely more than 20% other things going on Allen and very importantly. The sales of the iPhone even the old existing model have been very strong now we have anticipated. New model coming out iPhone six with people already kind of building up expectations for. Obviously we're looking at some wearable technology I think the news flow in general has been very positive for apple they're also going to be buying back a lot more stocks -- all that stuff. Coming combination would be announced stock split seems to have been a really good psychological boost. For apple I will point out the all time high. Priced in apple in the pre split basis was almost two years ago. At 700. Dollars a little over 700 dollars so this -- share price has to get. Above 100 dollars and thirty cents for the stock to be at a true new all time high. Let me ask just might -- let -- go because we we talk often times about how. The mechanics. Of the of the actual operation of a business as opposed to the popularity with investors -- sometimes not -- be -- -- but as you pointed out there though. Well there seems to be somewhat of a positive response -- -- -- the stock price in the 721 decision as well but we we're talking with us last week at the worldwide developers conference. There's a lot of buzz coming out about the news operating system. Getting exciting getting hyped up for there as well also that you. Being that beats acquisition a couple billion dollars as well so it seems that there might be kind of running in tandem where it is like affect the operations on. You know both sides of the other consumers door. Seem to be kind of working in tandem. Yet it seems right now that there is into a lot for investors to celebrate here interesting because they got a lot of criticism for the bees acquisition initially when it was first rumored. But it seems to mean people have realized a billion dollars is not exactly a big deal for this company and media shows. That top management -- at least focused on these narrower areas that they can actually create some value -- the same time that they work on the big stuff. Which is you know a new larger screen version of iPhone coming out just at a time. When half of all iPhone users will be -- for an upgrade some people really do you think you're the back into this year. We're gonna happen probably a lot more. Good news coming out of -- now that -- what happens always. The market tries to anticipate that that's why the -- stands on a pretty good -- All right my sense -- Toronto -- -- Monday afternoon my thanks so much appreciate it thanks. You've been watching story -- stay with abcnews.com. For latest headlines I'm -- Cutler and New York.

This transcript has been automatically generated and may not be 100% accurate.

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