Who Cares What Apple's Stock Price Is?

Apple's stock is trading at around $565 today. Apple thinks that number is too high, and so is going to cut it by six-sevenths, to some number around $80, by giving everyone six extra shares for each share they currently hold. This is not the sort of story where I explain to you that changing the nominal price of a stock doesn't change the economic value of the company; I hope we are all grown-ups here.

So, if the split doesn't have any economic impact, why bother? I've seen two explanations. One is that doing this will probably get Apple included in the Dow Jones Industrial Average, because they're not grown-ups at the Dow, and they weight their index by nominal stock prices, which is ridiculous.1 Now, if this is your explanation you need to dig a bit deeper, because who cares if Apple is included in the Dow? Getting added to the S&P 500 index is important, because it brings in a new, large, stable investor base of index funds, increasing value for shareholders. But not very much index money is invested in the Dow, because the Dow is ridiculous, and index investing is all about avoiding ridiculousness. So doing this is unlikely to attract many new investors, though you can't entirely rule out non-index but nonetheless Dow-focused investors.2