What's a Stock Split? Why Do Companies Split their Stocks? | INDmoney Classroom #10
Is a stock split good?
You cannot conclusively prove that a company is doing well just because it has split its stocks. Stock splits are done when a company feels that its share price has reached a certain level where investors in general are finding it unaffordable, thereby affecting its liquidity.
Why would a company split its stocks?
As explained above, a company might split its stocks to lower its share price to a more comfortable range for investors to trade easily, boosting the overall liquidity of the stock.
Do you lose money if a stock splits?
No. You don't lose any money post a stock split. It is just that the share gets split into the said ratio without affecting an increase or decrease in the share price.