Elementary question about stock prices (specifically AAPL aka Apple Inc.)

Factual Questions
1

I know this is an elementary question, but since I never buy stocks directly, I want to make sure I get this right.
A friend of mine, immediately after Steve Jobs was made interim CEO upon his return to Apple, told me I should buy Apple stock and he himself bought $5000 worth (or so he says and I have no reason to doubt him.) Today he was bragging again about his financial acumen. So I tried to get the straight dope on his investment.

Steve Jobs was named as interim CEO on 16 September 2007 (apple.com)

I looked up stock prices for stock symbol AAPL on Yahoo! finance

AAPL stock price history

October 1997
open 5.4225
high: 6.1875
low: 3.97
close: 4.2575

today 26 September 2007:
open: 139.94
high: 155
low: 130
close: 152.77

This would mean that his initial investment of $5000 is now worth
$5000 / 4.2575 * 152.77 = $179,412.8009 (I used close prices for this calculation)
or almost one hundred and eighty thousand dollars. Is that right? Or am I ignoring something like stock splits or what not that happened between 16 September 1997 and today? It is important for me to know so I can decide how much money he should give me since I’m one of his best friends.

My 401K investment isn’t doing nearly as well. :frowning:

2

You are ignoring the stock splits, and there have been two 2:1 splits, but it doesn’t matter since the 1997 price reflects it. He actually bought 300 shares at $17, roughly.

I’m just surprised he held it through that awful fall in 2000. It went from $30 to $7 in 4 months, which would have brought him almost back to where he started.

3

Pretty much yes. There’s been 2 stock splits since then, but those are calculated into the stock price. That is to say, he didn’t actually buy the stock at $4.25, but if he still has his shares today, that’s what he effectively paid per share.

on preview: what SmackFu said.

4

The awful fall in 2000 - do you remember what happened then? Was that around the time the G4 cube came out and didn’t sell as well as expected? I still think that was a nice-looking computer.

I don’t know if my friend kept all of the stock he bought in 1997, but at the time I told him I was behind him 100% (even though I wasn’t going to do anything so foolish with my money), so he at least owes me a free lunch.