After Surging 814% in 1 Year, Is a Stock Split Inevitable for Micron?
Micron stock trades at more than $1,000 per share.
Overview
Over the past year, shares of Micron Technology (NASDAQ: MU) have soared more than 800%. As of this writing (June 30), Micron stock trades at $1,142 and sits comfortably in the trillion-dollar club. Micron's rapid ascent is naturally leading investors to ask whether the company is positioned for a stock split.
Let's explore the mechanics of stock splits, the typical reasons why companies pursue them, and whether such a move would deliver meaningful benefits to Micron.
Details
During a stock split, a company simply increases the total number of outstanding shares by distributing additional shares on a proportional basis. For example, in a 5-for-1 split, a company with 1 million shares outstanding at $1,000 each would end up with 5 million shares trading at $200 post-split. In essence, the company's overall market capitalization remains unchanged because the reduction in stock price is offset by the increase in share count.
Source
Originally published at www.fool.com.