Stock splits, while less common now, were notably seen in 2023 with companies like Nvidia and Walmart participating. A stock split, such as Nvidia's 10-for-1 split, increases the number of shares while keeping the total market value the same. This can create a perceived affordability and increased investor interest. Despite this, research indicates that stock splits generally have little effect on the company's long-term performance, with outcomes spread evenly between positive and negative trends, suggesting the splits are more a matter of sentiment than fundamental change.
Stock splits can create a perception of increased accessibility and liquidity among investors, which can lead to heightened interest and bullish behavior despite the underlying value remaining unchanged.
While stock splits don't alter a company's value, they may influence investor sentiment by creating a perception of affordability, as seen with Nvidia's 10-for-1 split.
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