By Yaёl Bizouati-Kennedy
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The stock closed at $2,387 on June 3, started trading at around $120 on June 6, and was up 0.7% in pre-market trading.
According to Kiplinger, markets like splits as they give investors more flexibility, while bearing no impact on a company’s fundamentals or valuation.
“That’s because a split is essentially the same thing as making change. In this case, shareholders will effectively be swapping a $20 bill in return for 20 $1 bills,” Kiplinger’s Dan Burrows reported.
In addition, Barron’s reports another possible boost to the stock is that the stock split makes the company a candidate for inclusion in the Dow Jones Industrial Average (DJIA), as the DJIA weights components by price.
“A high-price stock moves the index more than a low-price one, and a four-figure stock would wield outsize influence on the index. But that change won’t happen quickly. The last change to a Dow component was in 2020, when Amgen, Honeywell, and Salesforce swapped in for Exxon Mobil, Pfizer, and Raytheon,” Barron’s reported.
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