Stock-Split Watch: Is TSMC Next?
Many of the world's largest tech companies routinely split their stocks as their share prices rise. Splits don't make a stock fundamentally cheaper, since they simply cut its existing shares into smaller slices which trade at lower prices. So instead of buying a whole pizza for $20, you're simply getting a quarter of a slice for $5.
Yet stock splits still attract a lot of attention from smaller investors who aren't willing to pay hundreds or thousands of dollars for a single share of a hot stock. They can also make it cheaper to trade options for a high-priced stock, since each contract is tethered to 100 shares, and easier for companies to subsidize their salaries with stock options and bonuses.
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Source Fool.com
