In this article, we will explore the potential value of 1000 shares of Apple (AAPL) if they were purchased at a price of $10 per share in the year 1990 and sold today. This analysis will help us understand the significant growth in Apple's stock price over the last three decades and the capital gains that could be realized.

Introduction to Apple's Historical Stock Value

Apple has a long and interesting history dating back to 1976. The company went public in 1980 and experienced significant growth and volatility in the years that followed. By 1990, Apple was a well-known company, but its stock price was much lower than it is today.

Calculating the Original Investment

Let's consider a scenario where 1000 shares of Apple were purchased at a price of $10 per share in 1990. This would have cost an investor:

$10/share * 1000 shares $10,000

This initial investment would have been made during a period of relative uncertainty for the company, given the challenges faced by Apple during the early 1990s, such as the breakup of the Apple Computer Inc. and the formation of the separate Apple Corporation and Apple, Inc.

Apple's Stock Price Evolution

Over the years, Apple's stock price has seen significant fluctuations. The stock split in 2005, from 2 for 1 to 10 for 1, diluted the cost per share, but the underlying value of the stock has continued to appreciate. As of this writing, the current per-share price of Apple on the NASDAQ is $214.10. This means that the 1000 shares originally purchased for $10,000 would now be worth:

$214.10/share * 1000 shares $214,100

Thus, if an investor had sold these shares at the current market price, they would have seen an incredible 2141% capital growth.

Assessing Capital Gains for Subsequent Years

Assuming that the investor held these shares through the year 2022, the capital gains would be calculated as:

$214,100 (current value) - $10,000 (original investment) $204,100 in capital gains.

Based on current tax rates, the capital gains tax would need to be calculated. If the capital gains tax rate is assumed to be 15%, the investor would pay:

$30,615 in capital gains tax (0.15 * $204,100).

This leaves the investor with:

$214,100 (current value) - $30,615 (tax) $173,485 in net proceeds.

Conclusion

The purchase of 1000 Apple shares at $10 per share in 1990 would have resulted in a significant gain if sold today, showcasing the power of long-term investment in the tech sector. This hypothetical scenario illustrates the importance of understanding historical stock performance and market trends when making investment decisions.