Companies like to see their stock prices rise. However, there are times when they may want to bring their stock prices down without affecting valuation, which sometimes leads a company to split its shares. In July, tech giant Apple (NASDAQ: AAPL) announced a 4-for-1 stock split, and less than two weeks later, electric vehicle manufacturer Tesla (NASDAQ: TSLA) also announced a split on a 5-for-1 basis.
Today, we'll look at whether virtual care provider Teladoc (NYSE: TDOC) will follow suit and be the next company to split its shares. The telehealth company's stock is performing well this year, rising more than 130% year to date, well above the S&P 500's 5% returns. And at a price tag of around $195, its share price is high enough that a split could be justifiable. Let's take a look at why the move could make sense for Teladoc and why the choice would pique investor attention.
A stock split technically does nothing for investors. If they invested $10,000 in a company, they'd own the same value after a split. The only difference is that a stock split changes the number of shares that an investor owns.
Source Fool.com