Stock Splits Boost Short-Term Performance

Are stock splits good, or bad for investors? Typically, most studies that look into the effect of stock splits, work around the thesis that the majority of companies have a ‘trading range’ for their stock, a price range within with they believe will attract the most shareholders. When the price moves out of this range, they split. Clearly, increasing the number of shares in issue, improving liquidity and reduced the price of each share, is likely to attract new shareholders and increase the convenience for existing holders. The darker side of stock splits But there’s a darker side to splits….