Do stocks ever split anymore?

Do stocks ever split anymore?

As of 2024-06-14, according to CNBC, many investors ask: do stocks ever split anymore? The short answer is yes. Public companies still carry out forward and reverse stock splits, but the frequency, rationale and market context have changed over decades. This article explains what stock splits are, why they became less common, why some firms resumed splits in the 2020s, and how investors should interpret split announcements. It also points to practical calendars and resources for following splits and highlights Bitget services for traders and custody.

Definition and mechanics of a stock split

A stock split is a corporate action that changes the number of outstanding shares while leaving the company's overall market capitalization (total value) unchanged. There are two basic types:

• Forward stock split: The company increases the number of outstanding shares and reduces the price per share by the split ratio. Common ratios are 2-for-1, 3-for-1, 4-for-1, 10-for-1 and larger (e.g., 20-for-1 or 50-for-1). For example, in a 4-for-1 split each existing share becomes four shares and the per-share price falls to roughly one-quarter.

• Reverse stock split: The company reduces the number of outstanding shares and increases the price per share by the inverse ratio (e.g., 1-for-10). A 1-for-10 reverse split consolidates ten shares into one. Reverse splits are often used by companies trying to meet exchange minimum price requirements or to improve the market perception of a low-priced stock.

Mechanically, a split adjusts share counts and per-share figures (price, earnings per share, book value per share), but it does not change the firm's fundamentals: assets, liabilities, and total shareholder equity remain the same. After a forward split, each investor holds more shares at a lower price; after a reverse split, each investor holds fewer shares at a higher price. Fractional shares created by splits are either paid out in cash or rounded according to the company’s split plan and the broker's procedures.

Historical overview

Peak era (1980s–1990s)

Stock splits were common during decades characterized by strong equity gains and rising per-share prices. From the 1980s through the late 1990s, many growing technology and consumer companies split shares repeatedly to keep individual share prices in a range that seemed accessible to retail investors. Splits were often interpreted as signals of rapid growth and management confidence. During the dot-com boom of the late 1990s, multiple high-profile companies executed serial splits as their share prices climbed.

Decline in frequency (2000s–2010s)

Starting in the 2000s and especially after the 2008 financial crisis, the frequency of forward splits declined. Several structural changes contributed to that decline: a greater share of equity ownership shifted to institutional investors who care more about dollar exposure than share count; brokerages and trading mechanisms evolved; and companies became less concerned with managing per-share price for psychological reasons. As a result, splits that were routine in prior decades became rarer for many large-cap names.

Recent resurgence (2021–2024+)

As of 2024-06-14, according to CNBC, stock splits saw a resurgence in the early-to-mid 2020s. Several mega-cap companies announced high-profile forward splits: for example, Amazon and Alphabet completed 20-for-1 splits in 2022 (both widely publicized), and companies such as Nvidia, Walmart, Broadcom and Chipotle announced or executed splits in 2023–2024. Media coverage and split calendars tracked by outlets such as The Motley Fool and Yahoo Finance show increased split announcements among high-priced, retail-facing and employee-option-heavy companies. This pattern demonstrates that while splits remain less routine than in the 1990s, they returned selectively when companies wanted to broaden retail access or address employee equity mechanics.

Why splits became less common

Several structural and institutional changes reduced the practical need for forward splits:

1. Institutional ownership: Large mutual funds, pension plans, and ETFs buy and sell by dollar amount rather than by share count. For these investors, a company’s per-share price is less relevant, reducing pressure on management to keep share prices low.

2. Fractional-share trading and modern brokerage services: Many brokers now permit fractional-share purchases, letting small retail investors buy portions of a single expensive share. This lowers the accessibility barrier created by high per-share prices.

3. Changes in trading technology and microstructure: Order routing, decimalization and improved liquidity infrastructure made it less necessary to manage share prices via splits to achieve tighter spreads and tradability.

4. Corporate signalling caution: Firms became mindful that a split can be interpreted as an overconfident signal; during volatile periods, management avoided moves that could be misinterpreted.

5. Administrative and compliance considerations: The costs (communications, paperwork, regulatory filings) and logistics of executing a split may outweigh perceived benefits for some companies.

These forces combined to reduce split frequency through the 2000s and 2010s. However, they did not eliminate splits as a tool; instead, they changed the circumstances under which firms decide to use them.

Why companies still split shares (rationale)

Companies choose forward splits for several common reasons — most are practical or behavioral rather than value-altering:

• Accessibility for retail investors: A lower per-share price can make it easier for small-dollar investors to buy whole shares. Many companies cite this reason publicly when announcing splits. For example, as of 2024-01-31, CNBC reported that Walmart described its split as a way to make shares more accessible to everyday investors.

• Employee equity and option plans: Employers often grant stock awards or options in share units. When a per-share price is very high, fractionalization for grants and exercises becomes more cumbersome. A split can simplify equity compensation and make grant sizes psychologically and administratively easier.

• Tradability and liquidity: Some firms believe a lower per-share price encourages trading and can broaden the shareholder base, potentially improving intraday liquidity and reducing bid-ask spreads for certain investor segments.

• Psychological and marketing reasons: Management may view a lower per-share price as a tool to attract retail attention, especially when targeting broad-based ownership. Announcements can also generate positive publicity.

• Signal of confidence: While not a guarantee, a split announcement can be interpreted as management signaling confidence in future prospects. Companies sometimes pair splits with share buybacks or investor communications to underscore strategic clarity.

Companies usually state these motives in press releases and shareholder communications when announcing splits.

Other modern influences reducing the need for splits

Several developments in brokerage services and market products have lessened the pressure to split:

• Fractional-share trading: Many brokers and trading platforms allow purchases of fractional shares, enabling retail investors to buy $10 or $50 worth of a high-priced stock rather than a full share.

• Dividend reinvestment plans (DRIPs) and ETFs: DRIPs allow investors to reinvest dividends into fractional shares, and ETFs allow diversified exposure to companies without needing to own full shares.

• Commission-free trading and mobile brokers: Lower transaction costs and easier account access have reduced hurdles for retail investors to buy high-priced stocks.

These features mean a high nominal share price is less of an ownership barrier than it once was. However, companies still choose splits for the nontechnical benefits noted above (employee plans, psychology, etc.).

Note: investors interested in custody or wallet solutions can explore Bitget Wallet for multi-asset custody and Bitget trading services for market access; these resources can help manage fractional positions and corporate actions within a single platform.

Market effects and empirical evidence

Scholarly and market analyses show that splits have measurable, though sometimes temporary, market effects:

• Trading volume: Forward splits are commonly followed by an increase in trading volume in the short term as retail interest and attention spike. The magnitude and persistence vary by stock and market context.

• Liquidity measures: Some studies and brokerage research report improved intraday liquidity and narrower bid-ask spreads after forward splits, though effects can reverse or normalize over time.

• Price performance: Historically, stocks that announce splits often show positive short-term price reactions, reflecting investor sentiment and potential selection bias (companies that split tend to be those already experiencing strong performance). Long-term abnormal returns attributable solely to the split are mixed in academic literature.

• Shareholder base: Splits can broaden the shareholder base by attracting small-dollar investors who prefer lower per-share prices, but the ultimate composition shift depends on broader market interest and product availability (ETFs, DRIPs, fractional trading).

Broker coverage and calendars (e.g., The Motley Fool's splits calendar and Yahoo Finance's split listings) often provide empirical tallies showing cyclical patterns of split announcements. As of 2024, broker and financial-press summaries noted increased split announcements among mega-cap firms, consistent with the observed resurgence.

Notable recent examples and case studies

Below are short case notes on high-profile modern splits. These entries summarize the public rationale and observable effects at the time of reporting.

• Nvidia (2024): Nvidia announced a 10-for-1 forward split as it became one of the largest market-cap companies in the world. As of 2024-06-14, CNBC reported the split as part of a broader trend of mega-cap firms making shares more accessible to retail investors. Nvidia’s split followed extraordinary share-price appreciation driven by demand for AI-related semiconductor products.

• Walmart (2024): As of 2024-01-31, CNBC reported Walmart’s announcement of a 3-for-1 split. Walmart framed the move as increasing accessibility for more shareholders, and the split highlighted how large-cap retail-facing companies sometimes act to broaden ownership.

• Broadcom (2024): Broadcom announced a 10-for-1 split during a period of strong revenue and margin performance. Company statements noted the split’s role in improving liquidity and accessibility for employees and investors.

• Chipotle (2024): Chipotle executed a 50-for-1 split to bring its per-share price into a lower nominal range. The company stated the split would make shares more affordable for employees and smaller investors.

• Amazon and Alphabet (2022): Both firms implemented 20-for-1 forward splits in 2022. These splits were explicitly designed to make shares more accessible to employees and retail holders after substantial multi-year gains.

• Apple (2020) and Tesla (2020): Both companies executed splits (Apple 4-for-1, Tesla 5-for-1) during periods of rapid price appreciation; each company cited accessibility for employees and retail investors.

These modern examples show that splits are selective tools used by large, high-priced firms when leadership aims to broaden access or simplify equity compensation mechanics.

Sources that track upcoming splits—such as The Motley Fool and Yahoo Finance—maintain calendars listing announced and effective split dates. As of 2024, these calendars showed an elevated concentration of split events among mega-cap and consumer-oriented firms.

Reverse splits — when they happen and why

Reverse stock splits consolidate shares and raise the per-share price. Typical reasons include:

• Exchange listing rules: Exchanges often have minimum price requirements for continued listing. Companies approaching delisting thresholds may execute reverse splits to meet minimum price standards and maintain listing status.

• Market perception and corporate housekeeping: Management may use reverse splits to alter the appearance of a stock that trades at a very low nominal price.

• Clean up the cap table: Very small public companies may use reverse splits to reduce administrative complexity.

Investor interpretation: Reverse splits are often seen as a negative signal because they frequently occur when a company is underperformance or facing listing pressure. However, a reverse split alone does not change the company’s fundamentals; it is a structural action that may be paired with broader restructuring.

How investors should interpret a stock split

When you see a split announcement, keep these neutral, beginner-friendly guidelines in mind:

• A split is generally neutral to fundamental value. It changes share count and per-share metrics but not the firm's enterprise value or economic fundamentals.

• A forward split can be a positive signal of management confidence and recent strong performance, but it is not a guarantee of continued outperformance.

• A reverse split can be a warning sign about price weakness or listing pressure, but investors should examine the underlying financials and company announcements for context.

• Look at fundamentals and valuation: Use the split announcement as one data point. Evaluate revenue growth, margins, free cash flow, debt levels and the company’s strategic outlook rather than relying on the split alone.

• Consider practical effects: If you hold options, RSUs or other equity compensation, a split changes grant sizes and strike prices proportionally. If your brokerage supports fractional shares, the split’s practical impact on your ability to hold smaller dollar amounts may be limited.

This neutral framework helps investors avoid overreacting to headline split news.

Frequency, trends, and outlook

Trends observed through 2024 show a pattern of decline through the 2000s and 2010s, followed by a selective comeback among large-cap, high-priced stocks in the early 2020s. Factors that may influence future split frequency include:

• Continued growth of fractional-share trading: If fractional trading becomes universal, the functional need for splits to improve retail access diminishes.

• Retail investor participation cycles: Periods of heightened retail engagement can motivate companies to split to capture attention and accessibility.

• Employee equity needs: Firms that use equity for compensation may split to keep grant sizes psychologically and administratively manageable.

• Mega-cap price appreciation: If more companies reach very high nominal share prices, selective splits may continue among names that care about retail access and employee grant mechanics.

Overall outlook: Do stocks ever split anymore? Yes — but selectively. Companies will choose splits when the expected benefits (accessibility, simplification of equity compensation, publicity) outweigh costs. Macro trends such as fractional trading and ETF adoption will moderate how often splits are the right corporate choice.

Practical resources and calendars

To track announced and upcoming splits, investors can consult financial media and split calendars maintained by market outlets. Useful resources include split calendars and firm press releases. Notable calendars and trackers as of 2024 include The Motley Fool’s split calendar and Yahoo Finance’s split listings. Fidelity and broker research pieces also provide primers explaining mechanics and investor implications.

If you trade or want custody services, consider Bitget for market access and Bitget Wallet for custody of digital assets and related services. For equities and corporate-action notices, check your brokerage’s corporate-actions feed or the company’s investor relations page for official filings and effective dates.

See also

• Stock buybacks
• Dividends and DRIPs (dividend reinvestment plans)
• Fractional-share trading
• Reverse stock split
• Employee stock options and RSUs
• Market capitalization and share count

References and reporting dates

• As of 2024-06-14, CNBC — "Stock splits are back in fashion. Here's why..." (coverage of 2020s resurgence and motives).
• As of 2024-01-31, CNBC — "Walmart's stock split only shows how rare it has become..." (reporting on Walmart’s 3-for-1 split announcement and context).
• As of 2024, Fidelity — "Stock splits: What you need to know" (investor primer on mechanics and implications).
• As of 2024, The Motley Fool — "Upcoming Stock Splits / Calendar" (calendar tracking announced and upcoming splits).
• As of 2024, IG — "Everything you need to know about stock splits and reverse stock splits" (explanatory guide).
• As of 2024, Yahoo Finance — "Stock Splits Calendar" (listings of announced splits and effective dates).
• As of 2024, Kiplinger — coverage of candidate companies and rationale for splitting.
• As of 2024, U.S. News / Money — "8 Companies That Could Issue the Next Stock Split" (candidates and rationale).

All references above are public reporting or investor-education pieces that track corporate split announcements and investor guidance. Users should consult official company press releases and regulatory filings for definitive effective dates and split ratios.

Practical next steps

• If you hold a stock that announces a split, review the company’s press release and your brokerage’s corporate-actions notice for the effective date and fractional-share handling.

• Watch split calendars (e.g., The Motley Fool, Yahoo Finance) and company investor relations pages to track announced splits.

• For custody and trading services, explore Bitget’s trading platform and Bitget Wallet for related services and corporate-action notices.

Further exploration: If you want a tailored walkthrough of how a specific split affects option contracts, RSUs or your brokerage holdings, gather the company announcement and your account statements, and consult your broker or a licensed financial advisor for specific account-level effects. This article is informational and not investment advice.

Note: This article is neutral and fact-focused. It summarizes reporting as of the cited dates. It does not provide investment advice.