Apple and Google Need to Split Their Stock Prices

People are selling instinctively now and not on principles or valuations. Apple and Google can prevent this.

Apple and Google don't like to split their stocks.  I believe that Apple did it once in the last 10 years and Google has never done it.  Steve Jobs and Sergey Brin like to use their high stock prices to demonstrate how influential they have been.

In my own opinion, these stocks are very compelling now, unless we really are heading for a global economic collapse in which case nothing is compelling.

But, in this environment, people are selling everything.  They are being led by talking heads to sell, sell and sell some more.  Panic has set in. 

Panic is a psychological condition.  It is based on emotion.  When you are driven by emotion to sell, you are more likely to sell something with a higher price, because you perceive that you could still extract some value from it, and less likely to look at valuations.

I don't think that people would be rushing to sell Apple and Google if they were $20 stocks, even if the valuations were the same.

Herman Kline
Herman Kline: Herman is a recent graduate of Wesleyan College with a strong interest in finance and firm belief that General Electric is a scam on the public perpetuated by Jack Welch and Jeff Immelt that will ultimately fail to do hidden off-balance sheet liabilities. Herman's favorite place is on the side of a mountain or rock climbing wall.

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Comments

  • Drew

    October 06, 2008

    Apple sort of did a split recently......their stock price has plummeted in half!!!

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