Companies with substantially high share prices typically split their stocks. A stock split lowers the price of a stock and increases the number of outstanding shares with no change in the company’s market capitalization and other financial metrics. It improves trading liquidity and makes the stock seem more affordable to investors.
The Federal Reserve’s tightening of monetary policy to combat inflationary pressure and the rising recession worries have led to bearish sentiment in the stock market, and stocks are expected to plummet further. The major stock indices wrapped up their worst first half in more than 50 years. The benchmark S&P 500 has plunged 19.7% year-to-date, while Dow Jones has dropped 14.4%.
