FAST COMPANY -- Why we’re seeing fewer stock splits like Walmart and more stock spinoffs like GE
Mar 7, 2024
BY ALLAN SLOAN
Two weeks ago, Walmart did something that has become a lot less common in the stock market than it once was: It carried out a 3-for-1 stock split, giving shareholders two new shares for each share they owned. Although Walmart’s total market value of about $472 billion remained the same, the price of each share fell from around $175 to around $58. (As of March 6, the stock price was up to around $60 a share.) Walmart said the move was intended to help make acquiring shares more accessible for employees participating in its stock-purchase plan.
“Companies want to get rid of businesses that aren’t essential or aren’t doing well,” says Jim Osman, Edge Group’s founder and chief executive. “Spinoffs also make smaller, more flexible companies that can better respond to fast changes in the market.”