Walmart (NYSE: WMT) customers expect "every day low prices". Now Walmart stock investors might enjoy reduced pricing.
Walmart announced a 3-for-1 stock split after the market closes on Feb. 23 on Jan. 30. After the split, investors will receive two more shares for every share they had on Feb. 22
For novice stock market investors, this may seem like a certain method to treble your money. That's not how stock splits operate. Investing is never simple.
Businesses are divided into numerous shares and represented by stocks. Each share represents a portion of the business. Example: Walmart As of now, it has 2.7 billion shares. One Walmart share gives investors a little piece of the company.
Walmart will divide its shares next month, changing the share count. Walmart will hold 8.1 billion shares, up from 2.7 billion. Walmart's corporate value remains unchanged. Each share will represent a lesser part of the firm and be worth less.
When Walmart splits its stock 3-for-1, investors shouldn't expect to treble their money. Investment value will mainly remain intact. They'll have three times as many shares but each will be valued about a third less, even things out.
This doesn't imply Walmart's 3-for-1 stock split is inconsequential to investors. However, Walmart's stock split rationale is intriguing.
Walmart shares now sell at $166. Investors under $166 can invest with fractional shares. Many brokerages allow investors to invest a dollar in fractional shares.
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