Possible Stock Split? This Stock Has Surged 284% Since 2023 -- Here's Why You Shouldn't Wait to Buy It
This stock can keep climbing higher even if management doesn't announce a stock split this year.
When a company's stock splits, it doesn't change any of the underlying fundamentals of the company. Shareholders still own the exact same percentage of the businesses as they did before the stock split.
But enacting a stock split can be a very strong signal from management to investors. Management will usually initiate a stock split after a run-up in the price of the stock. When it announces a split, it's suggesting the current run-up in price is justified and that it expects the price to continue climbing.
On the other hand, the confidence boost provided by a stock split will only go as far as the company's next earnings report or news item. If the fundamentals of the business are no good, or the stock has gotten ahead of itself, it doesn't make sense to buy it just because of a stock-split announcement.
