"Stock splits don't create any value whatsoever, but when they are announced, they tend to attract considerable attention from retail investors. Indeed, more accessibility for everyday investors is a good thing, and while lower share prices may entice some to pick up a few shares, giving them a bit of a temporary jolt, it's vital that investors don't lose sight of what really matters: intrinsic value."
"Indeed, it doesn't matter how many times you cut a share price; it's the business itself that matters most. In any case, if you're a retail investor who has always wished you could buy a stock like Meta Platforms ( NASDAQ:META) without having to put up just north of $700 for a single share, stock splits can be a huge piece of news, especially if a split happens at a good time."
Stock splits do not create intrinsic value but often attract significant retail investor attention by lowering the per-share price and increasing accessibility. Lower share prices can entice small investors to buy a few shares and produce temporary price boosts, yet the underlying business performance drives long-term returns. Meta Platforms trades at a modest trailing P/E of 25.5 while aggressively investing in AI talent, which could support further appreciation. Rising share prices toward Wall Street targets near $1,100 would likely increase the probability of a stock split within the next two years, improving affordability for new investors.
Read at 24/7 Wall St.
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