Stock Splits
Stock splits are not important!!!!
Stock splits are a simple mathematical action. You divide the price by two and multiply the number of shares by two. Of course, if you own a stock, it doubles, the stock splits, and now you have twice as many shares at the same price…that is very good. But, it is no better than having the same number of shares that are twice as valuable than when you originally purchased. It should have no affect on what the company is worth, or how the price will move in the future.
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I agree with all that, but what about the psychological effect that stock splits have on many people? If a lot of people believe that stock splits do affect future value, then a lot of people will buy accordingly, which would affect the price.
That being said, I do agree that it’s just a “simple mathematical action”.