New York, NY – Stock splits have been on the rise in 2024, with companies like Walmart and Nvidia making moves to appeal to a broader range of investors, including their own employees. This trend comes as a response to the increasing presence of retail investors in the market, spurred by the aftermath of the COVID-19 pandemic.
In the second quarter of 2024, there were 100 announced stock splits, marking the highest level since Q2 of 2023. Furthermore, the first half of 2024 saw a total of 168 split announcements, the most in over a decade. This influx of stock splits indicates a shift in companies’ strategies to attract more investors and improve accessibility to their shares.
While the total number of stock splits has increased, the majority of these splits have been reverse splits, where shares are consolidated to increase the stock price while maintaining the company’s market value. The prevalence of reverse splits has been a trend for years, driven by various motivations such as meeting listing requirements on exchanges.
As the year progresses, the trend of stock splits continues, with July 2024 seeing the highest number of split announcements in nine years. Investment teams are faced with the challenge of adjusting stock prices accurately to account for these corporate actions, highlighting the importance of precise data analysis in financial markets.
Notable traditional stock splits in 2024 include companies like Walmart, Nvidia, Chipotle, Broadcom, and Williams-Sonoma, all making strategic moves to attract new investors. On the other hand, notable reverse splits have been observed for companies like Qiagen, Rent the Runway, Buzzfeed, and others, indicating a diverse range of strategies employed by companies in response to market conditions.
The momentum in stock splits is expected to continue in the latter half of 2024, with corporations seeking to capitalize on the positive impact of these actions on stock prices. The potential bullish trend following traditional splits, as reported by Bank of America, may incentivize more companies across different market caps and industries to consider similar strategies for growth and market appeal.
