"Undoubtedly, you really can't blame new, smaller retail investors for forgoing the names with high share prices, even if one can technically afford to buy a single share or two. Personally, I think it's a matter of convenience for the retail crowd, and such splits, I think, are a move that's retail-friendly and could draw further inflows into a stock."
"In any case, stock splits aren't exactly a value creator, and if you're looking to punch your ticket to shares at a good price, a split announcement might actually work against you, given the positive reaction that tends to follow despite no actual value being created by the act of a split! Personally, I find splits as perfectly fine, but I wouldn't want to get caught chasing a split-related news event,"
Netflix will undergo a 10-for-1 split and ServiceNow will undergo a 5-for-1 split, reducing per-share prices and increasing accessibility for smaller retail investors. Splits often make high-priced stocks more attractive to retail buyers by avoiding partial-share purchases and improving convenience. Splits do not create intrinsic value, and split announcements commonly trigger positive market reactions despite no change in fundamentals. Chasing a split-driven rally can expose investors to buying at inflated prices. Investors should focus on company fundamentals and avoid purchasing solely because of split news. Both splits are scheduled to take effect at the end of November.
Read at 24/7 Wall St.
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