Stock Split Watch: Is MicroStrategy or Microsoft Next?

MicroStrategy's Soaring Stock Price

MicroStrategy, a business intelligence company turned Bitcoin investor, has seen its stock price skyrocket in recent months. The company's shares have surged over 300% year-to-date, largely due to its substantial Bitcoin holdings and the cryptocurrency's price recovery 1

. This dramatic increase has led to speculation about a potential stock split, as the high share price may be deterring some retail investors.

The Case for a MicroStrategy Stock Split

With MicroStrategy's stock trading above $500 per share, a split could make the stock more accessible to a broader range of investors. Stock splits are often seen as a way to increase liquidity and attract more retail investors, potentially boosting overall market interest 1

. However, it's important to note that a stock split doesn't change the fundamental value of a company; it simply divides existing shares into smaller pieces.

Microsoft's Stock Performance and Split History

Meanwhile, tech giant Microsoft has also been the subject of stock split rumors. The company's stock has experienced significant growth, with shares up about 40% year-to-date 2

. Microsoft has a history of stock splits, having implemented nine splits since going public in 1986. However, its last split occurred in 2003, leaving investors wondering if another one is on the horizon.

Factors Influencing Microsoft's Split Decision

Several factors could influence Microsoft's decision to split its stock. The company's continued strong performance, driven by its cloud computing and AI initiatives, has pushed its stock price to new heights 2

. A split could make Microsoft shares more attainable for retail investors and potentially increase trading volume. However, the rise of fractional share investing has somewhat reduced the need for splits among large-cap stocks.

The Impact of Stock Splits on Investors

While stock splits can generate excitement and potentially increase short-term trading activity, they don't inherently change a company's value or future prospects. For long-term investors, the focus should remain on the underlying business fundamentals rather than the nominal share price 2

. Nevertheless, splits can signal management's confidence in future growth and may lead to increased retail investor participation.

Market Trends and Investor Sentiment

The recent trend of high-profile stock splits, including those by Apple, Tesla, and Amazon, has reignited interest in this corporate action. Investors often view splits as a positive sign, potentially leading to increased demand for the stock. However, it's crucial to remember that a split alone doesn't guarantee future performance or returns 1