Anticipated Equity Divisions Schedule for 2024
Anticipated Equity Divisions Schedule for 2024
When a corporation decides to divide its shares, it generates a lot of buzz. This event known as a stock split happens when a company increases its number of outstanding shares by dividing existing shares or multiplying the share count and lowering the market value per share to balance things out. This process reduces the share price without altering the fundamental worth of a business or the overall value of shares held by shareholders.
Stock splits often pique the interest of retail investors in a flourishing business. For instance, post its 2024 split announcement, the stock price of tech giant *Nvidia (NVDA* 3.08%) witnessed a surge.
Retail Investors
These are individuals engaging in stock trading with personal funds, distinct from institutional investors. At present, few reputable companies are scheduled for stock splits in the remaining part of 2024. Nonetheless, there are whispers that tech giants such as *Microsoft (MSFT -0.1%) and Meta Platforms (META* -1.73%) might announce stock splits soon.
Other possible stocks for 2024 or 2025 include:
- Financial analytics company *Fair Isaac (FICO* 2.25%) last split its stock in 2004. Shares were trading around $2,000 in November 2024, following a 20-year hiatus.
- Booking Holdings (BKNG 1.37%), formerly recognized as Priceline.com, conducted a reverse stock split in 2003 after the dot-com bubble burst. Six shares held by investors at the time were consolidated into one share. Each share was worth over $4,700 by November 2024.
Stock splits in 2024
10-for-1
2024 saw a surge in stock splits, following the 2022 market downturn. Several prominent stock splits grabbed headlines in that period. Here's what you need to know about the most notable stock splits that happened or were announced in 2024:
Aug 6, 2024
| Company | Stock Split | Announcement Date | Effective Date || --- | --- | --- | --- || Super Micro (NASDAQ:SMCI) | 10-for-1 | Aug 6, 2024 | Oct. 1, 2024 || Deckers Outdoor (NYSE:DECK) | 6-for-1 | Sep. 9 2024 | Sep. 16, 2024 || Microstrategy (NASDAQ:MSTR) | 10-for-1 | July 11, 2024 | Aug. 1, 2024 || Broadcom (NASDAQ:AVGO) | 10-for-1 | June 12 2024 | July 15, 2024 || Chipotle Mexican Grill (NYSE:CMG) | 50-for-1 | March 19 2024 | June 25, 2024 || Walmart (NYSE:WMT) | 3 for 1 | Jan 30 2024 | Feb 26, 2024 |
Oct. 1, 2024
1. Super Micro
Server manufacturer Super Micro Computer announced a 10-for-1 stock split in August 2024, offering shareholders nine additional shares for each share owned. The distribution took place at market close on Oct. 1, 2024.
6-for-1
2. Deckers Brands
Sep. 9 2024
The parent company of renowned apparel brands like UGG and Teva, announced its 6-for-1 split after its 2024 annual meeting. Shareholders with records on Sept. 6 received five additional shares for each share owned. The distribution took place at market close on Sept. 16, 2024.
Sep. 16, 2024
3. MicroStrategy
MicroStrategy announced its 10-for-1 stock split on July 11, 2024. Shareholders with records on Aug. 1 received nine additional shares for each share owned. The distribution took place at the close of market on Aug. 7, 2024.
10-for-1
4. Broadcom
July 11, 2024
Tech giant Broadcom announced its 10-for-1 stock split alongside its second-quarter earnings report on June 12, 2024. Shareholders with records on July 11 received nine additional shares for each share owned. The distribution took place on July 15.
Aug. 1, 2024
5. Chipotle
The successful restaurant operator announced a 50-for-1 stock split in March 2024, marking one of the largest stock splits in NYSE history. Shareholders received 49 new shares for each share owned, with trading beginning on a split-adjusted basis on June 26.
10-for-1
6. Walmart
June 12 2024
The global retail giant announced a 3-for-1 stock split in late January 2024, enabling the stock to be more accessible to retail investors. The split was completed in late February 2024.
July 15, 2024
Companies' Motives for Stock Splits
Companies' Motives for Stock Splits
50-for-1
Stock split adjustments (including reverse splits) typically have no impact on a company's intrinsic worth. They also don't influence an investor's stake in the company. Imagine holding a piece of pizza that accounts for a quarter of the entire pie. Cutting up your slice into smaller pieces doesn't alter the fact that you still hold a quarter of the entire pie.
March 19 2024
The primary motivation for companies to carry out stock splits often is to captivate fresh investors. Lower share prices can entice numerous individual investors to consider investing in well-known corporations.
June 25, 2024
Financial firms often present employees with a share of the company as employee compensation, usually distributed as stock-based compensation. Lower share prices allow businesses to better manage the benefits provided to their employees.
An Employee Stock Ownership Plan (ESOP) is a benefit structure that reimburses personnel in company shares. In addition, numerous corporations acquire shares as part of their investment return to existing shareholders. Lower share prices facilitate easier purchasing and returns to investors.
3 for 1
Take Amazon (AMZN 0.73%) for example. In their 2022 stock split filing, the company stated that the split would, "allow our employees more flexibility in managing their equity in Amazon and make the share price more accessible for those looking to invest in the company."
Jan 30 2024
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Should you invest?
Should you purchase a stock due to an upcoming split?
If you are a long-term investor, planning to own a company's shares for a few years, an upcoming stock split should not motivate you to invest in the company. Companies frequently have valid reasons for initiating a split, but it does not alter shareholders' fundamental value.
Instead, focus on businesses experiencing long-term secular growth trends, growing faster than their competition, and maintaining robust profit margins and financial health.
FAQ
Upcoming stock splits FAQ
Is it beneficial if my stock splits?
It's not necessarily advantageous. While market interest in a stock may increase following a split announcement, any stock price increases are short-lived if the business's financial results don't match the anticipated stock price growth.
Do stocks rise after a split?
Occasionally. Increased retail investor interest in the lower per-share price is common due to the misconception that a split makes a company "cheaper." The stock might go up after a split, but the gains tend to be temporary unless the business generates higher corresponding financial results.
How can you determine when a stock will split?
There is no fool-proof method to foresee whether a company's management will declare a stock split. However, strong corporate performance and a history of stock splits might suggest a higher likelihood of an upcoming split announcement.
What does a stock split signify?
A stock split does not affect the fundamental value of the business. Consider it like slicing a pizza into smaller pieces: The total pizza size remains unchanged, but there are now more slices available.
John Mackey, former CEO of Whole Foods Market (an Amazon subsidiary), is a member of Our Website’s board of directors. Randi Zuckerberg, a former market development director and spokesperson for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of Our Website's board of directors. Matt Frankel has positions in Amazon. Our Website has positions in and recommends Amazon, Booking Holdings, Chipotle Mexican Grill, Meta Platforms, Microsoft, Nvidia, and Walmart. Our Website recommends Broadcom and Fair Isaac and recommends the following options: long January 2026 $395 calls on Microsoft, short December 2024 $54 puts on Chipotle Mexican Grill, and short January 2026 $405 calls on Microsoft. Our Website has a disclosure policy.
Retail investors often find interest in a company following a stock split announcement, as lower share prices can attract individual investors. For instance, tech giant Nvidia witnessed a surge in stock price after its 2024 split announcement.
Furthermore, financial analytics company Fair Isaac, known for its stock split in 2004, experienced a significant increase in its share price by November 2024 after a 20-year hiatus.
In relation to investing, retail investors should focus on companies exhibiting long-term secular growth trends, outperforming their competition, and maintaining robust financial health, rather than making decisions based solely on stock splits.