10 Stock Splits Investors Could See Happen by 2026
Few things garner attention for a stock as much as a stock split. Though a split does nothing to change the fundamentals of a stock or the business, it excites investors for a number of reasons.First, they're the primary tool by which companies can artificially lower their share prices, thereby making them more affordable to individual investors. Second, they act as a milestone for the stock, essentially resetting its growth path so it can rise again. Third, management chooses the timing of stock splits, and they generally signal confidence from management that the stock can keep going up. If management was not confident about the stock's ability to keep gaining, they would be less likely to issue a stock split.Finally, there's also evidence that stock-split stocks outperform the S&P 500 over the 12 months following the split, according to research from Bank of America. Continue reading
Few things garner attention for a stock as much as a stock split. Though a split does nothing to change the fundamentals of a stock or the business, it excites investors for a number of reasons.
First, they're the primary tool by which companies can artificially lower their share prices, thereby making them more affordable to individual investors. Second, they act as a milestone for the stock, essentially resetting its growth path so it can rise again. Third, management chooses the timing of stock splits, and they generally signal confidence from management that the stock can keep going up. If management was not confident about the stock's ability to keep gaining, they would be less likely to issue a stock split.
Finally, there's also evidence that stock-split stocks outperform the S&P 500 over the 12 months following the split, according to research from Bank of America.
