Stock Split Watch: Is MercadoLibre Next?
Stock splits used to be much more common, but the rise of fractional shares in brokerage accounts has nullified that practice, especially in the U.S. However, some companies have split their stocks recently (like Tesla, Alphabet, and Amazon) to make stock options a more accessible form of compensation to employees. All three of these companies' stocks were trading above $1,000 when this split occurred, making this a standard threshold for determining if a company should split its stock.
One stock that may be close to splitting is MercadoLibre (NASDAQ: MELI), which currently sits at around $1,000 per share. However, the stock is also more than 50% below its all-time high after almost eclipsing the $2,000 mark in January 2021. While MercadoLibre may be reaching a point where it could split, the business is also executing at a high level, despite what its stock chart looks like.
Why do investors look for stock splits? It's pretty simple: The only reason to split your stock is if the price has gone too high. How does a stock price increase? The business grows with solid execution and has further growth on the horizon.
Source Fool.com
