Stock splits are significant events for high-priced stocks, as they reduce the price per share, making them more accessible to retail investors. According to Bank of America analysts, splits tend to have a bullish effect on stock performance, with average returns of 25% in the year following a split, compared to 12% for the broader market. Recent examples include Super Micro Computer and Arista Networks, which conducted splits to attract retail investment while showcasing confidence in future growth, making these stocks appealing to investors.
"Splits seem to be bullish across market regimes, something management teams might consider if shares look too expensive for buybacks, offering new access to retail investors."
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