Stock question (record date?)

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Stock question (record date?)

Postposted on Sun Jun 01, 2014 9:20 am

Hey guys! Quick question here. I want to buy a couple shares of Apple (AAPL) before it splits. Now I have to a "shareholder of record" on June 2nd (tomorrow!) and I have a couple questions I need to know by tomorrow morning.

1) If I buy first thing tomorrow morning at 9:30, will I be a shareholder of record still? Or is there some processing time involved, and I should have bought last week?

2) If I am not a shareholder of record, what happens to the two shares I just bought at 600+ dollars? Do they disappear or something? That would suck, to say the least.

I've been mostly holding dividend stocks, but I'm willing to make a play on this split and possibly some growth money, but I don't want to flush away 1300 bucks either. Thanks in advance for the help!
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 9:25 am

Too late. You'd need to be a stockholder of record at market open and there's no way to get your name into Apple's share records before the market opens. Should have bought last week.

My guess is that the split will take effect at market open, so if you buy 2 shares, you're buying 2 of the split shares (or 1 "old" share).
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 10:17 am

They don't just go "poof". Depending on when the split occurs you're buying one or the other (pre-split or post-split).

Stock splits are really more of a bookkeeping (and psychological...) thing anyway. The market capitalization of the company doesn't change; all that happens is that there are suddenly twice as many shares at half the price (assuming a 2:1 split).
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 10:25 am

According to my grandfather it's going to be a 7:1 (!) split.
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 10:32 am

That's pretty unusual, but the same idea still holds. 7x as many shares outstanding, at 1/7th the pre-split price. Most companies will announce a split long before the share price gets high enough for a 7:1 split to make sense.
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 10:54 am

No prob. I figured as much. Stocks are always a gamble, and my gamble was just a rush of new buyers due to a lower point of entry. No biggie. :)
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 11:02 am

bthylafh wrote:According to my grandfather it's going to be a 7:1 (!) split.

Oi, big split. Guess that Carl Icahn is getting to them.
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 11:04 am

kvndoom wrote:No prob. I figured as much. Stocks are always a gamble, and my gamble was just a rush of new buyers due to a lower point of entry. No biggie. :)

Since Apple has become a dividend stock, this may be an opportunity.

As always, this advice is worth exactly what you paid for it (my standard disclaimer in situations like these).
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 11:12 am

just brew it! wrote:Most companies will announce a split long before the share price gets high enough for a 7:1 split to make sense.

And Berkshire Hathaway A closed at $192,000 on Friday, down from its 52-week high of $194,670.
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Re: Stock question (record date?)

Postposted on Sun Jun 01, 2014 11:20 am

Captain Ned wrote:
just brew it! wrote:Most companies will announce a split long before the share price gets high enough for a 7:1 split to make sense.

And Berkshire Hathaway A closed at $192,000 on Friday, down from its 52-week high of $194,670.

...well yeah. "Stunt stocks" notwithstanding.
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Re: Stock question (record date?)

Postposted on Mon Jun 02, 2014 9:08 am

See this FAQ: http://investor.apple.com/faq.cfm?FaqSetID=2

Not sure the point of the record date really, as you will receive split shares on the ex date if you buy between the record date and the ex date. Seems "The Motely Fool agrees: 'The "record date" means virtually nothing to the stockholder.'

One thing to check is what your brokers policy is for stop loss orders in force on the ex date.

Still debating whether to buy some on the 9th.

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Re: Stock question (record date?)

Postposted on Mon Jun 02, 2014 9:27 am

[quote="SecretSquirrel"Not sure the point of the record date really, as you will receive split shares on the ex date if you buy between the record date and the ex date. Seems "The Motely Fool agrees: 'The "record date" means virtually nothing to the stockholder.'[/quote]
Agreed as to splits, but record date is very important in the dividend world.
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Re: Stock question (record date?)

Postposted on Mon Jun 02, 2014 10:03 pm

Captain Ned wrote:
SecretSquirrel wrote:Not sure the point of the record date really, as you will receive split shares on the ex date if you buy between the record date and the ex date. Seems "The Motely Fool agrees: 'The "record date" means virtually nothing to the stockholder.'

Agreed as to splits, but record date is very important in the dividend world.


Yes, and it makes sense there too. Own the stock on the date of record, get the dividend. That was the context in which I was familiar with the term. Didn't realize they set it for splits as well.

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