Upcoming Stock Splits: Everything You Need to Know
What is a Stock Split?
A stock split is a corporate action in which a company divides its existing shares into a larger number of shares. This does not affect the company's overall value, but it does reduce the price of each individual share.
Why Do Companies Split Stocks?
Companies may split their stocks for several reasons:
- To make their shares more affordable for investors
- To increase liquidity and trading volume
- To reward existing shareholders
Types of Stock Splits
There are two main types of stock splits:
- Forward split: This split increases the number of shares outstanding and reduces the price of each share.
- Reverse split: This split decreases the number of shares outstanding and increases the price of each share.
Upcoming Stock Splits in 2023
Several companies have announced stock splits for 2023. Here is a list of upcoming stock splits:
- Tesla (TSLA): 3-for-1 forward split on March 10, 2023
- Berkshire Hathaway (BRK.B): 20-for-1 forward split on June 30, 2023
- Amazon (AMZN): 20-for-1 forward split on June 6, 2023
How to Invest in Stock Splits
Investors can invest in stock splits by purchasing shares of the company before the split date. After the split, the investor will have a larger number of shares at a lower price per share.
Conclusion
Stock splits can be a valuable tool for companies to increase liquidity and reward shareholders. Investors should be aware of upcoming stock splits and consider their investment strategy accordingly.
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