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If a company determines that its stock price is too high, it can lower the value of each share by increasing the number of outstanding shares through a corporate action called a stock split.
The main effect of stock splits is an increase in the liquidity of a stock: [3] there are more buyers and sellers for 10 shares at $10 than 1 share at $100. Some companies avoid a stock split to obtain the opposite strategy: by refusing to split the stock and keeping the price high, they reduce trading volume.
A stock split is neither good nor bad, and long-term investors should probably be indifferent to them. They have no impact on the value of your investment or the value of the company. However ...
For example, Nvidia (NASDAQ: NVDA) went through a 10-for-1 stock split in June 2024 when its shares topped $1,200. The announcement caused NVDA to jump 7% at the opening bell the day after.
Image source: Getty Images. A stock split is a tool publicly traded companies can utilize to adjust their share prices and outstanding share counts by the same factor. A company's market cap and ...
There appears to be some pressure for a stock split for Home Depot. Few stocks have matched its track record for overall returns (total return of 421% over the past decade compared to the S&P 500 ...
Many stock trading platforms offer the ability to buy fractional shares. So, no matter how expensive a stock gets, people can still invest in it without the company needing to resort to a stock split.
For the 12th time in 50 years, Walmart will conduct a stock split in an effort to make shares more affordable for its employees. Walmart last carried out a 2-for-1 stock split on April 20, 1999.