Stock splits have been a popular market theme in recent times, with giants across industries launching these operations. Why do investors love stock splits? Because they lower the per-share price of a stock, making it easier for a broader range of investors to get in on that particular player.
In a split, a company issues additional shares to current holders, a move that lowers the price without changing anything fundamental. The company’s market value and the value of your investment if you’re already a shareholder remain the same.
A stock split isn’t a catalyst for stock performance, so investors won’t buy a particular player just because it’s launched a split. But companies that launch splits generally have done well in the past — and have confidence that their shares can once again rise from their new, post-split prices. So, it’s worth giving them a second look and considering…
