More Companies Could Split Their Stocks By 2021

August 17, 2020
235 Views

Both Apple Inc. (NASDAQ: AAPL) and Tesla Inc. (NASDAQ: TSLA) announced stock splits this month. These companies will create more shares, leaving their market capitalizations intact, but decreasing the price per share.

Splits help to keep stocks affordable and can boost trading volume. With high-demand stocks like Apple and Tesla, splits could potentially attract so much new investment that the market capitalizations increase dramatically.

With the stock market performing well, even with the ongoing recession and health crisis, other companies are now considering similar moves.

Which Companies Could Split in the Coming Months?

Popular stocks priced beyond the average investor are most likely to split in the coming months.

Amazon.com Inc. (NASDAQ: AMZN) is the most notable example. A single share trades for more than $3,100 today, which prices many individual investors out of the market. Amazon’s stock hasn’t split since 2009, and the rate of its price growth has increased in recent years. Amazon is already one of the most valuable publicly traded companies in the world, but a split now could attract even more capital from mom and pop investors.

Top analysts also believe the following companies are considering splitting their stocks for today’s bull market:

  • Chipotle Mexican Grill (NYSE: CMG): Trades above $1,180 today and is up 45% over the last year.
  • Netflix (NASDAQ: NFLX): Trades above $480 today and is up 59% over the last year.
  • Facebook Inc. (NASDAQ: FB): Trades above $261 today and is up 42% over the last year.
  • Alphabet Inc. (NASDAQ: GOOGL): Trades above $1,500 today and is up 27% over the last year.

All these stocks are popular with investors today. If any of them were to split, effectively bringing down the price per share, investment activity could increase even more.

Splitting large stocks does come with some downsides. High priced stocks are more likely to attract long-term investors, which can help to protect the share price. Affordable stocks are more likely to trade frequently, which can make prices volatile.

Overall, especially considering positive sentiment in the market, some splits on larger stocks would be positive. Investors should watch the markets closely in the coming months, as some of the stocks listed above could quickly become bargains.

You may be interested

Netflix May Be Preparing to Increase Prices
Investing
77 views
Investing
77 views

Netflix May Be Preparing to Increase Prices

Lamont J - October 19, 2020

Streaming company Netflix Inc. (NASDAQ: NFLX) could be preparing to increase its subscription prices in the United States. Here’s what…

Starbucks Will Pay Executives Based on Diversity Targets
Business
81 views
Business
81 views

Starbucks Will Pay Executives Based on Diversity Targets

Becky H - October 16, 2020

Starbucks Corp. (NASDAQ: SBUX) is pushing to become a more diverse and inclusive company. An announcement this week has revealed…

Watch these Semiconductor Stocks in October
Business
169 views
Business
169 views

Watch these Semiconductor Stocks in October

Adam R - October 15, 2020

Semiconductors drive the technology industry forward. They are also, by application, the backbone of all modern technology. Semiconductors are used…