A Stock Split Changes Nothing About the Stock's Long-Term Prospects. So Why Does Monster Beverage's Aug. 11 Split Matter?
The 2-for-1 split changes nothing about the business. The growth that led to it is another matter.
Overview
Energy drink maker Monster Beverage (NASDAQ: MNST) is about to halve its stock price on purpose. The company's 2-for-1 split, announced July 8, hands each shareholder of record as of July 24 one additional share for every share held. The new shares are distributed after the market closes on Aug. 10, and the stock begins trading at its split-adjusted price on Aug. 11.
Mechanically, nothing of substance happens. Every investor's stake is worth the same the morning after as the night before, and the business itself is untouched.
Details
So why pay attention at all? Because a split is usually something a board does after a big run in a stock. And in Monster's case, the run -- and the growth behind it -- is the part actually worth an investor's time.
Source
Originally published at www.fool.com.