From Nasdaq: 2024-11-16 11:00:04

Several prominent companies, including Nvidia, Chipotle Mexican Grill, Broadcom, and MicroStrategy, have announced stock splits this year. Arista Networks recently joined the trend with its own announcement. Looking ahead to 2025, Microsoft and ASML Holding are potential candidates for stock splits. Stock splits are a corporate action that divides existing shares into multiple shares, making them more affordable and increasing liquidity.

Stock splits can be 2-for-1, meaning each shareholder gets two new shares for everyone’s old share. The value of the shares decreases, but the number of shares increases. Larger splits, like four-for-one, can make expensive stocks more affordable for investors. A reverse stock split decreases the number of outstanding shares, increasing the price per share.

Companies may perform stock splits to make shares more affordable, increase liquidity, and attract investors. Stock splits can have a positive impact on shareholders by making shares more accessible and increasing demand. However, investors should conduct their own research before investing in any company, as stock splits do not guarantee success. It is important to analyze the company’s financials, management, and competitive landscape before making any investment decisions.



Read more at Nasdaq: Stock Splits: Everything You Wanted to Ask