A 224-Year-Old Wall Street Stalwart Just Announced a Reverse Stock Split — and It’s Truly a Head-Scratcher Although the rise of artificial intelligence has hogged most of the glory, it’s not the only trend that’s been piquing investors’ interests in recent years.
Euphoria concerning stock splits in brand-name businesses is another big-time catalyst for equities on Wall Street
While a handful of prominent stock splits have already taken shape this year, including forward splits for online travel site Booking Holdings and e-commerce-based used-vehicle retailer Carvana, it’s the recently announced reverse split from 224-year-old specialty chemicals company DuPont (NYSE: DD) that’s a true eye-opener and head-scratcher. Not all stock splits are created equally A stock split is an event that allows a company (even a private one) to cosmetically adjust its share price and outstanding share count by the same factor. These changes are cosmetic in the sense that they don’t alter a company’s market cap or operating performance.
Most investors gravitate to companies announcing and completing forward splits. This is the type of split that makes shares more nominally affordable for retail investors who can’t buy fractional shares through their broker. Typically, if a company’s share price is high enough to become burdensome for everyday investors, its management team must be doing something right.