Summary: Stock splits divide existing shares into multiple shares, making them more affordable and increasing liquidity. Neutral

From Nasdaq

August 13, 2024 1:04:21 pm:

Several prominent companies announced stock splits this year, including Nvidia (NVDA), Chipotle Mexican Grill (CMG), Broadcom (AVGO), and MicroStrategy (MSTR). Stock splits are a corporate action where companies divide existing shares into multiple shares, making them more affordable and increasing liquidity. It does not add or take away any value from the company.

A traditional stock split can be 2-for-1, where each shareholder receives two new shares for every old share. The value of the shares decreases, but the number of shares doubles. Stock splits can also be for other denominations like four-for-one or eight-for-one, making expensive stocks more affordable for investors.

Reverse stock splits decrease the number of outstanding shares but do not add or remove value from the company. Companies choose to perform stock splits to make their shares more affordable and increase liquidity. Stock splits can be positive for shareholders, as they can increase demand for shares and lead to a higher share price.

Read more at Nasdaq: Stock Split 101: Everything Investors Need to Know