What are the advantages of a stock split?

[Suba]

As stock investors, of course we are all familiar with the term stock split. which we can interpret as a corporate action (issuer) dividing the nominal stock price according to a certain ratio (for example 1:3), so that the stock in circulation will increase/triple and the price per share will also fall to a third of the original stock price. In general, stock splits are carried out by corporations/issuers that have strong fundamentals but their stock prices have reached their highest point. So, in your opinion, what are the advantages of stock splits for both issuers and investors?

 

[Starmix]

I have not experienced it. I am new to that term but for sure there's a good advantage of stock splitting.

 

[Suba]

I have not experienced it. I am new to that term but for sure there's a good advantage of stock splitting.

You have stock, right? If you have 100 stocks at a price @ 30 per stock, then you have stock worth $ 3000. But the corporation that issued stocks at $ 30 is too high, so they do a 1:3 stock split. so you have 300 shares of stock with a value of $3000, and the price per stock will be $10. So retail investors are also able to buy stock at a price of $10. So one of the advantages of a stock split is that many people can own stocks.

 

[Starmix]

Wow, at least many can buy stocks. I am not one year owner of stocks. I only have 10 stocks that was the only available that time. Thanks for this. It might be raised during the stock holders meeting.

 

[Suba]

That's absolutely true, the more people have stock, the trading volume will also increase, so that gradually the price will also be pushed up, meaning that if you, as a long-time stock holder, will benefit a lot.

 

[Starmix]

That's absolutely true, the more people have stock, the trading volume will also increase, so that gradually the price will also be pushed up, meaning that if you, as a long-time stock holder, will benefit a lot.

I am planning to call my friend,the accountant to ask if there is an available stock to buy.I want to add.

 

[kerryjoy]

I haven't encountered it before. As a newcomer to the term, I'm certain there are significant advantages to stock splitting.