Stock splitting is something that investors like. When stocks split, it means you have twice the amount of shares you did before. The value of each one does go down but the amount increases. This gives you greater leverage and the stocks have a chance of going up in value in the future.
Companies sometimes like to split their stocks down the middle. If you have 100 stocks worth $2 each and the company splits its stocks, you will then have 200 stocks worth $1 each. The total value is the same but you feel like you have more stocks. It is like changing money you have two notes instead of one although your pair of $10 notes are the same in value as the $20 you had a moment ago.
Smaller investors can get into the market more easily because of stock splitting. Someone is more likely to buy cheaper stock if they do not have a lot of money to invest. If a company is selling stock for $300, an investor might think that is above their budget, but if the stock is split and ends up at $150, the investor might consider that a reasonable price. Splitting stocks is a game where the value does not go up or down but people prefer stocks which seem to be cheaper and think they...
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