Netflix (NASDAQ: NFLX) popped in early November after announcing a 10-for-1 stock split. With the split now complete, investors can buy one share of Netflix for around $100 rather than $1,000. However, there are also 10 times as many Netflix shares outstanding, so the value, or market capitalization, of the company, wasn’t impacted by the stock split.
Still, stock splits carry several benefits, including increasing Netflix’s chances of being added to the Dow Jones Industrial Average, acting as a vote of confidence that management believes the stock price can grow over time, making it easier to trade options on a stock (which are typically in 100-share increments), and removing a psychological barrier that some investors may feel when buying stocks that are too high in price. For these reasons, stock splits generally garner favorable reactions from investors.
Here’s why Meta Platforms (NASDAQ: META), ASML (NASDAQ: ASML), and Eli Lilly (NYSE: LLY) could issue stock splits in 2026, and why all three growth stocks are top buys in December.
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Source Fool.com
