Apple is splitting its stock 4-for-1 in two weeks. What does it mean for you? What might it mean for the broader market? And why have stock split announcements become so scarce in recent years? Did something change?
The peak of the stock split era was from 1995 through 2000. Investors were buying stocks specifically because they were about to split. It was one of the dopiest aspects of an already preposterously amateurish era of speculation and spectacle.
But there we were, buying stuff like Lycos and Excite@Home and SDLI Interactive as they crossed above 95 per share, eagerly awaiting the split announcement we knew would bring in the next wave of equally carefree buyers to replace us. The saddest part about the whole thing is that it actually worked. For awhile.
This year, over 40% of S&P 500 stocks are currently trading above 100. But almost none of them are undergoing a stock split. Why? In the new episode of my podcast, The Compound Show, I attempt to answer the question, and I think I have it right.
What do you think?
Some further reading on the topic and some of the resources I mentioned: