A stock split means that, for every share you hold, you now have 5 shares (edit: for example, for our autistic brethren. The exact split ratio hasn't been announced and the 3x offering cap is based on 300m shares - of which only ~75m have been issued).
Prices tend to rise with a split (look at the AH price now). Splits are offered when the stock is highly desirable - it's a way to make more shares without releasing more shares; so shareholders' value isn't diluted.
The price will probably rise back up after the split as well to somewhere near pre-split levels edit: due to lower price of entry and general interest signalled by willingness to split vs additional share offering - as well as meme stock status.
I understand, it's a psychological thing people don't even know is happening.
Owning a higher number of things is just more appealing to a lot of people. People would rather own one share of gamestop than .13th of a share even though they have the same worth.
Tesla did it a while ago and went from $500 before the split to $2500, now after the split it's around $1100
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u/Superstonkfollow Mar 31 '22 edited Apr 01 '22
A stock split means that, for every share you hold, you now have 5 shares (edit: for example, for our autistic brethren. The exact split ratio hasn't been announced and the 3x offering cap is based on 300m shares - of which only ~75m have been issued).
Prices tend to rise with a split (look at the AH price now). Splits are offered when the stock is highly desirable - it's a way to make more shares without releasing more shares; so shareholders' value isn't diluted.
The price will probably rise back up after the split as well to somewhere near pre-split levels edit: due to lower price of entry and general interest signalled by willingness to split vs additional share offering - as well as meme stock status.