Stock splits are less common today but are significant as they can improve liquidity, attract more investors, and signal company optimism, despite not altering company value.
The anticipation of stock splits, like Nvidia's 10-for-1 split, can reflect market momentum, although other factors such as supply chain delays can have a more significant impact on share prices.
Understanding stock splits is crucial; they effectively increase the number of shares without impacting overall company value, thereby potentially attracting a larger pool of investors.
Reverse stock splits, like a one-for-two arrangement, can help companies avoid penny stock status and assist in meeting stock exchange requirements, but they do not change intrinsic company value.
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