Stock Splits: Are They Good or Bad?

[petroteq]

Stock splits have been on the rise recently, with Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), Tesla (NASDAQ: TSLA), and GameStop (NYSE: GME) among some of the well-known companies to announce they will be splitting their shares.

Please share your valuable views on this..

 

[Red_Lesta]

They are kind of necessary in order to attract new investors and make them more liquid in a way.
Imagine you started off transacting in $10 bill, then after a while you could only spend $100 bills, or $1000 bills.
Smaller nominal values work better

 

[frnw]

Actually stock split is nothing. I think the main idea is something like marketing. When new investors see AMZN, GOOGL, or TSLA at a smaller price instead of 2000$ or 3500$ it's easier to invest in these biggest companies.

 

[stoch]

Stock splits have been on the rise recently, with Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), Tesla (NASDAQ: TSLA), and GameStop (NYSE: GME) among some of the well-known companies to announce they will be splitting their shares.

Please share your valuable views on this..

I consider it a net positive event since it increases liquidity both from the supply and demand side as more buyers now can afford to buy the stock while sellers realize that and may be willing to offer more stocks too.

 

[godfather]

Stock splits actually goes in both ways...both in positive as well as kind of negative... 2 type of splits are there forward as well as negative splits... simply like if share price risen too high a forward split can reduce price and this will attract new investors... and opposite reverse splits is like share price is down too low that might even get delisted.. reverse split can help a bit... if u hold 10 shares it will go down in reverse split according to ratio given...

 

[Sonali Vidi]

Splits are frequently a bullish sign because when valuations are this high, smaller investors wanting to diversify their holdings may not be able to purchase the shares. Owners of stocks that split may not see significant gains right away, but they shouldn't sell the shares because the split is probably a good indicator.

 

[Shivani Verma]

Stock splits are good for investors like me and you because they increase the liquidity of the stock, which makes it easier to buy and sell. They also increase the number of shares outstanding, which can lead to a higher market capitalization and a higher stock price. Finally, stock splits can signal to the market that the company is doing well and is confident in its future prospects.

 

[Ananya Kumar]

They are typically a sign of a bullish trend. So, as long as the split doesn’t affect your position, don’t fret about it too much.

 

[stoch]

I think stock split is good because it makes the asset more accessible for investors who don't have enough capital but still want to receive dividends. Also it helps existing investors to improve their allocation of capital into that asset.

 

[Kamala Patel]

I agree with @godfather , stock splits can be either good or bad. It depends on the intention.