Stock-Split Watch: Is Costco Next?
Technically, a stock split doesn't change a thing about the value of a company. So as investors, why do we care so much about them? Perhaps because it could imply that management believes the business has a long runway for growth. A decision to split a stock may be to help retail investors feel better about the affordability of the shares. And it's not uncommon for shares to rally if a stock split is announced.
To be sure, if management wasn't confident that its business was in good shape, it wouldn't want to see shares tumble after a split is enacted. With popular names like Apple and Tesla completing stock splits last year, investors may be watching for another big name to make that announcement. With its business thriving, and its stock price approaching $450 per share, warehouse retailer Costco Wholesale (NASDAQ: COST) could be the next well-known name to declare a split.
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Source Fool.com
