Apple’s Stock Price: 6-to-1 Split and Headed to the DJIA?

Hola Todos!

Financially speaking, Apple has certainly earned the right to be considered for the Dow Jones Industrial Average and Paul R. La Monica of CNNmoney.com makes a solid case for Apple’s inclusion (click here).  The current tech companies on the DJIA include struggling Cisco and HP, as well as, the stronger set of IBM, Microsoft, and Intel.

One major issue that would prevent Apple from joining the DJIA is that the Dow is a price-weighted average and not a market cap-weighted index like the S&P 500 or the NASDAQ Composite.  With Apple’s share price hovering around $600, Apple would skew the Dow too much at its current price but a 6-to-1 split could rectify that.

The question remains however, does CEO Tim Cook want to steer Apple in the DJIA direction?  While there is no question that Mr. Cook is doing things a bit differently than Mr. Jobs (dividends for instance), but I have listened to Mr. Cook on a number of earnings calls and I’m not even sure I would even use the word “lukewarm” to describe his interest on this issue when probed by the analysts.

There is no question, just like Mr. Jobs, that Mr. Cook’s #1 focus is on Apple’s products and not Wall Street.  My though is unless there is a strategic reason or positioning that Apple wants to achieve, Mr. Cook will not distract Apple from its main focus: products.  And with all that is rumored on Apple’s plate for the remainder of this year (click here), Apple probably does not want to be distracted.  Moreover, Apple does one or two major things at a time, and I doubt that this is #1 or #2 over the next 6 months.

Something to think about today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

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