Investors love when companies announce splits, viewing them as bullish indicators of future progress, despite the fact that splits do not affect a company’s fundamentals.
With Microsoft’s stock trading above $400 for the first time in over 20 years, there is speculation that it might soon announce a stock split.
Forward splits, like Broadcom's 10-for-1 split, reward shareholders with more shares while the price drops proportionally, signaling a company’s initiative to create shareholder value.
Stock splits are primarily non-events for a company's business; however, the response to them can reflect how companies manage their perceived shareholder value.
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