Apple‘s decision to split its stock was done to help make it more accessible for investors, CNBC’s Jim Cramer said Friday, referencing a conversation he had with its CEO, Tim Cook.
“I think Apple is taking the right move. Tim told me last night, ‘Hey, I want more people in the stock,'” Cramer said on “Squawk Box.” “These other companies should do that too.”
The iPhone maker, which reported an 11% sales increase in its latest quarter, also announced Thursday it would do a four-for-one stock split in late August.
Apple shareholders will receive three additional shares at the close of business on Aug. 24. Apple was trading around $407 on Friday morning, meaning that investors would be able to buy shares around $102 when the stock starts to trade on a split-adjusted basis Aug. 31.
Apple has done this multiple times in the past, too, most recently in 2014 when it did a seven-to-one stock split. Apple was then trading north of $600 per share.
A stock split does not alter a company’s fundamentals, Cramer explained on “Squawk on the Street.” But Cramer said it can make a stock more appealing to retail investors who may shy away from investing in a company due to a high price tag — kind of like sticker shock for equities.
“The idea that he wants more people in his stock is refreshing,” Cramer said of Apple’s Cook. “He doesn’t play to the hedge funds. He plays to the people who buy the product and have 99% satisfaction rating. That’s who he plays to.”
The “Mad Money” host said other companies do not appear to place as much of an emphasis on accessibility for retail investors, such as Amazon. The e-commerce and cloud giant was trading around $3,200 per share, based in premarket moves.
“Apple cares about the little guy. Amazon is not focused on that. They’re focused on getting the goods to the little guy,” Cramer said.
Disclosure: Cramer’s charitable trust owns shares of Apple and Amazon.