Stock split and shares purchasing.?

Question

Why do companies announce a stock-split ? Share prices come down after a stock split. So, is it advisable to buy shares after a stock-split ?

Answer 1

Why ? Only the " board" of the company knows.

...but, there are statistics that show that AFTER a split, MOST companies perform a little better than the market average...something like 8% better in six months...12% in a year...( now that's just " better than the average"...not outright 8 or 12 percent ..)

Answer 2

Stock splits are designed to increase liquidity in the share market.  They are announced so investors don't panic when they see their share price drop precipitously.

If its a good stock, buy it.  Don't worry about the split.  However, you should check to see when the last split occurred.  If a stock splits every 12-18 months, then take a pass.  The company is trying to drive the share price based on stock splits rather than fundamentals (earnings, increasing margins, etc.).  Price gains due to these kinds of stock splits are unsustainable.

Answer 3

well at least my series 6 license comes in handy somewhere. lol. a stock split isis made to increase the number of shares available to the public. stock splits will lower the price of the stock in the marketplace, making it more affordable to investors. i believe its a smart idea to buy stocks in a stock split. but you have to know the company history before making that decision