Upcoming Stock Splits 2023 and How They Work

Stock splits can be a great opportunity to buy more shares of your favorite companies at a lower cost. A stock split is when a company divides its existing shares into multiple new shares, usually to make the stock more affordable for investors.

This can lead to an increase in trading volume and a more stable stock price. For example, if a company splits its stock 2-for-1, you'll receive one additional share for each share you already own.

Some companies are planning stock splits in 2023, which could give investors a chance to buy more shares at a lower price. This is often a sign that the company is confident in its future growth and wants to make its stock more accessible to a wider range of investors.

Stock splits can also make a stock more attractive to investors, as it may seem like a better value.

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A stock split is a company action that divides its existing shares into multiple shares, increasing the number of shares outstanding and decreasing the price of shares to reflect the split.

Here's an interesting read: What Are Shares in Stocks

The decision to split a stock is usually made by a company's board of directors, and it can add considerable liquidity to the stock's secondary market by making it more attractive to investors.

Stock splits generally take place when a stock's price has risen to a point that makes it less liquid and less accessible to investors with less money.

By splitting the stock, the company can make it more accessible to a wider range of investors, which can boost trading volume and increase liquidity.

The company will announce the ratio of the stock split and the day when it will occur, and on that day, the original shares trading on the relevant stock exchange will open at an adjusted price.

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A stock split is essentially a way to break down one share of a stock into two or more shares, reducing its value by half. This doesn't add any value to the stock itself.

The ratio of the split doesn't have to be 2 to 1, but it's a common one. The ratio often depends on the price of the stock, with higher priced stocks splitting enough times to get the share price below $100.

If you own a stock that splits, you'll end up with twice the shares at half the value for each. But the total value of your investment doesn't change.

A stock split is often seen as a positive sign, as it can make a stock more accessible to smaller investors who want to stay diversified.

Curious to learn more? Check out: Compared to Growth Stocks Value Stocks' Price-earnings Ratio Is Typically

As we explore the world of stock splits, let's take a look at some potential candidates and examples.

Companies with high stock prices, like Chipotle ($3,230) and Broadcom ($1,679), are already splitting their stocks. This trend may encourage other retail-facing companies to follow suit.

Booking Holdings ($3,852), Autozone ($2,809), and Deckers Outdoors ($1,026) are holding out for now, but they might reconsider if they sense a trend.

Retail-facing companies with lower price profiles, such as Spotify ($305), Ulta Beauty ($397), and ServiceNow ($715), may also become candidates for stock splits.

Here are some common stock split ratios to keep in mind:

A stock split doesn't add any value to a stock, but it can make the stock more attractive to smaller investors.

If you're eager to stay on top of the latest stock splits, there are several reliable sources you can turn to.

For real-time updates, check out the official websites of the companies that are planning to split their stocks.

You can also rely on reputable financial news outlets, such as Bloomberg or CNBC, for the latest information on upcoming stock splits.

In addition to these sources, consider following financial influencers or experts on social media platforms like Twitter or LinkedIn.

For another approach, see: Canaccord Financial Stock

Investing in ETFs can be a great way to diversify your portfolio and potentially reduce risk.

In fact, some of the upcoming stock splits in 2023 involve companies that are also included in popular ETFs, such as the SPDR S&P 500 ETF Trust (SPY) and the Vanguard Total Stock Market ETF (VTI).

The SPY ETF holds a significant portion of its assets in Apple Inc. (AAPL), which is set to split its stock in June 2023, making it an attractive option for investors looking to capitalize on the split.

Investors can also consider the Invesco QQQ ETF (QQQ), which holds a large stake in Amazon.com, Inc. (AMZN), another company with a stock split planned for 2023.

The QQQ ETF has historically provided a high level of correlation with the Nasdaq-100 Index, making it a popular choice for investors looking to track the performance of the index's top stocks.

Investors should be aware that stock splits can also lead to changes in the underlying holdings of an ETF, so it's essential to review the ETF's holdings and prospectus before making any investment decisions.

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