Apple Shares Up More Than 20,000% Since IPO

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Apple Inc.’s (NASDAQ: AAPL) initial public offering (IPO) leapt out of the gate on December 12, 1980. The company sold 4.6 million shares at $22 a share and sold out virtually immediately. With a capital raise of about $100 million, it was the largest IPO since Ford’s in 1956.

Apple has split its shares four times since the IPO: a two-for-one split on June 16, 1987; another two-for-one split on June 21, 2000; a third such split on February 28, 2005; and a seven-for-one split on June 9, 2014. On a split-adjusted basis, Apple stock has risen by well over 20,000% since 1980.

A $1,000 investment in 1980 would have gotten an investor 45 whole shares (no fractional shares). The first split doubled the number to 90, the second to 180 and the third to 360. The 2014 split would have boosted the number of shares to 2,520. At Friday’s closing price of $143.65, that $1,000 investment would be worth $361,998.00.

The first big increase in the value of the shares came in the fall of 2004, three years after the introduction of the iPod. A second big pop began in January of 2009, two years after the launch of the iPhone. Through April of 2012, the shares rose more than 500% ($100 a share) before falling to lows below $60 a share a year later.

Smartphone sales were losing ground to Samsung and Google’s Android. In a report from May of 2013, a Gartner analyst concluded:

Apple is faced with the challenge of being increasingly dependent on the replacement market as its addressable market is capped. The next two quarters will also be challenging, as there are no new products are expected to be coming before the third quarter of 2013.

The iPad had been out for three years by then, and the Apple Watch was still two years in the future. But neither of these would make much difference beyond an initial spike generated primarily by Apple enthusiasts.

Apple sold some 78 million iPhones in the company’s fiscal first quarter that ended last December. Analysts expect sales to top 50 million when Apple reports fiscal second-quarter results on Tuesday, May 2.

The company’s value is driven by the iPhone and by the belief among analysts and investors that Apple can and will remain a technology innovator. The 10th anniversary iPhone is due out later this year, and while the rumored improvements are important, they are more incremental than game-changing. But they will be enough, probably, to enable Apple to hold on to its premium pricing and high margins.

One other thing that continues to drive Apple’s share price is its $250 billion cash pile, most of which is kept offshore. Given the president’s fondness for putting cash back into corporate and investors’ hands, a tax holiday allowing U.S. firms to repatriate more than $1 trillion held offshore is widely viewed as an opportunity for companies to pay out bigger dividends as they share the wealth. None is as wealthy as Apple, with its market cap of more than $750 billion.

When the company reports earnings Tuesday, analysts are looking for earnings per share of $2.02 on revenues of $52.97 billion. A year ago Apple profits totaled $1.90 per share on revenues of $50.56 billion. For the full year, analysts expect to see earnings of $8.95 per share and revenues of $228.57 billion.