Stock splits can signal positive market sentiment and enhance stock liquidity and attractiveness. Although split adjustments don't change intrinsic value, they lead to increased accessibility for investors. For instance, O'Reilly Automotive's recent 15:1 stock split has made shares much cheaper, improving affordability for employees and investors alike. Similarly, the ARK 21Shares Bitcoin ETF plans a 3:1 split to foster accessibility. Research indicates these stock splits significantly outperform the S&P 500 one year later, making them an important event for investors to monitor.
"Splits matter - because these stocks outperform after the announcement, by a lot. Average returns one year later are 25% vs. 12% for the S&P 500 SPX as a whole, say researchers at Bank of America."
"This split will make our common stock more accessible to our team members, enabling them to acquire whole shares, rather than fractions, more readily through our stock purchase program, which allows them to purchase stock conveniently through payroll deductions at a 15% discount."
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