Broadcom (NASDAQ:AVGO) recently announced a 10-for-1 stock split, scheduled to take place after the market closes on July 12. This move will reduce the trading price of the stock from approximately $1,700 to $170. A stock split simply divides a stock into smaller portions, so the underlying valuations remain the same.
While the split won’t make shares more affordable for investors, as most brokerages already allow for the purchase of fractional shares, it will make Broadcom’s options cheaper to trade. This is because a single contract is tied to 100 underlying shares. Additionally, the split will make it easier for the company to pay out stock-based compensation in smaller increments.
Overall, the stock split is a strategic move by Broadcom that will have implications for both investors and the company itself. It’s important for shareholders to be aware of these changes and how they may impact their investment.
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