Stock Split Is All But Dead and a New Study Says Save Your Tears
- Executive reluctance has led to record low of share splits
- Yet attributing market calm to lack of splits may be stretch
A trader views speaks on a mobile phone on the main trading floor of the Warsaw Stock Exchange in Warsaw, Poland, on May 24, 2011.
Photographer: John Guillemin/BloombergThis article is for subscribers only.
One minor mystery of the bull market has been the almost complete disappearance of stock splits. New research suggests there’s more to it than just passive investors who don’t care what a share costs.
A plethora of benefits accrue when equities trade in the three and four digits, says Wolfe Research. High-priced stocks have lower volatility, less short interest and lower transaction costs, the New York-based firm found.