What is the reason IBM stocks split? Do you think it will soon split now due to the stocks falling?

Question

What is the reason IBM stocks split? Do you think it will soon split now due to the stocks falling?

Answer 1

Stock splits are a decision made by the company.  There is no reason why a decline in stock price would "cause" a split.

Answer 2

Stocks typically split because the price has RISEN substantially.  The argument is that there is a "preferred trading range" (for most stocks something like $30-60 per share).  Therefore, if the stock price rises and becomes way out of line, say $110 per share then a 2-for-1 stock split (which will cause the price to be cut in half) would bring it back into the range at $55 a share while a 3-for-1 split would bring it into the range at $36.67 per share (110 divided by 3).

Much less common is a reverse split but they do occur occasionally.  Suppose that IBM is at $20 per share.  A reverse split of 1-for-2 would double the price to $40 and again put it back into the preferred trading range.