Stock splits hold no intrinsic value as they do not alter a company's fundamental metrics like earnings. However, they are popular among investors for their perceived bullish signals. Companies like Nvidia execute splits to enhance share affordability and improve liquidity, ultimately attracting smaller investors. Despite the splits being practically neutral in value, they can lead to short-term price increases and enhanced market performance. Notably, Nvidia's split has not diminished its appeal as a strong long-term investment option in the face of soaring demand for AI technologies.
The value of a stock split is exactly zero as it does not affect a company's underlying fundamentals; its main role is psychological.
Despite being deemed worthless in determining long-term value, stock splits influence investor behavior and market perception positively.
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