Stock splits are actions taken by corporations to make their shares nominally affordable for more retail investors. These usually occur after a period of significant growth and/or innovation.
What is it about stock splits that captures the imagination of investors? After all, the intrinsic value of the company hasn’t changed. But investor psychology is one of the most important factors that drives a stock’s short-term performance. It can be hard for retail investors to consider buying a stock trading at $500, let alone $1,000.
