Prediction: These 2 Companies Will Split Their Stocks by 2027
Stock splits can get the market excited, even though nothing changes for the business fundamentally, including its future prospects. So what's the reason behind a rally following a Stock split? Once a company's share price goes above a certain psychological threshold, the average investor begins to perceive the Stock as "expensive" and worries about being unable to buy enough (or even whole) shares of that company.
When the executive leadership and board perceive such a loss in interest in the underlying stock, they typically undertake a stock split, thus generating renewed investor interest as shares then seem more "affordable" post the split, pushing up the stock price.
One way to predict which companies might engage in such a move is to look for companies whose shares are not only trading at comparatively hefty sticker prices, but whose businesses are likely to keep performing well.
Source Fool.com
