At $300 per share, Apple joins the high-priced elite, where the rules are somewhat different

For one thing, it is nearly impossible for the average retail shareholder to directly own a meaningful number of shares in these companies. (Through such vehicles as mutual funds and exchange-traded funds, the average retail stockpicker can gain some access to these companies, but still a very minimal stake nonetheless).

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Indeed, about 80 percent of Google's shares outstanding is owned by institutions, while the figure for Apple is about 70 percent. (In contrast, Citigroup (NYSE: C), which now trades at about $4 per share, has only about 38 percent ownership institutions).

“I think it's fair to say that the higher-priced stocks tend to have very high institutional ownership,” said Sundaresh Ramnath, associate professor of accounting at the University of Miami-School of Business Administration.

Of course, a company can reduce its per-share price by implementing a stock split – but Apple hasn't enacted a split in more than five years; and Google has never had one.

Perhaps the question should be – do companies with highly-priced shares have any incentive to keep the value so high as to prevent ownership by retail investors?

“There's no real upside to having a lot of retail stockholders,” Ramnath said.
“The downside of having too many retail owners is that you might introduce too much volatility, because with a lower-priced share many day-traders and short-term investors can enter the picture.”

Ramnath cites Warren Buffet, the owner of Berkshire-Hathaway.

“As a value-oriented, long-term investor, Buffet likes having investors who are in it for the long haul,” he noted.
“I think he made a conscious decision not to split [the stock] and let day traders in. His desire was to have stable long-term investors invest in the stock rather than speculators who only increase volatility.”

Those who can't afford the huge price tag on Berkshire-Hathaway's A shares, might opt for the B shares (NYSE: BRK.B), which currently trade at about $84 per share – but even that price is beyond the reach of most average investors.

Fred Fuld, president of Stockerblog.com, a financial/markets blog, takes a somewhat different view.