Tech Sell-Off: 2 Stock Splits That Could Lead the Market Higher
Sometimes when a company generates significant growth and attracts a lot of stock purchasing interest, its stock price soars to the point that it becomes too expensive for small investors to even consider trying to buy. Warren Buffett's holding company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), is a great example. Its Class A stock now trades at around $477,000 for a single share. Berkshire management wanted to make the company more accessible to shareholders, so it began issuing Class B shares in 1996. That stock trades at a more reasonable $320 a share.
Some hypergrowth technology companies face a similar popularity problem, but rather than issue a new class of shares, they've instead opted to conduct a stock split. Google parent company Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) Class A shares trade around $2,310 per share right now, but it recently announced a 20-for-1 split to occur in mid-July, which will increase the number of shares in circulation by 19 times, while shrinking its stock price down to about $115.50.
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Source Fool.com
