Although Wall Street was rightly fascinated by the long-term potential Artificial Intelligence (AI) – Analysts at PricewaterhouseCoopers believe that artificial intelligence could add $15.7 trillion to the global economy by 2030 – and the excitement surrounding stock splits has played a significant role in lifting Wall Street’s major stock indexes to record levels in 2024.
A stock split is an event that allows a publicly traded company to change its stock price and the number of outstanding shares by the same factor. Keep in mind that these adjustments are purely cosmetic and have no impact on the company’s market value or underlying operating performance.
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Since the consumer goods juggernaut Walmart The party got started with the completion of a 3-for-1 split in late February, and more than a dozen high-profile companies have followed in its footsteps, All but one were of the forward type. Futures splits are designed to reduce a company’s stock price to make it more accessible to ordinary investors who lack access to fractional stock purchases with their broker.
While many of the Class of 2024 stock splits are market leaders, their outlook can vary widely. As we head into November, one stock unique to the stock split stands out as a bargain, while two others are worth avoiding.
Although most investors are attracted to companies that implement forward splits, the only notable reverse split for 2024 is a unique stock that can be confidently acquired in November. I’m talking about the satellite radio operator Sirius XM Holdings (NASDAQ:SIRI)which completed a 1-for-10 reverse split upon the closing of its merger with Liberty Media’s Sirius XM tracking stock, Liberty Sirius XM Group, after the close of trading on September 9.
Companies that complete reverse stock splits often do so to avoid delisting from a major stock exchange. What makes Sirius XM unique is that there was no risk of booting from the system Nasdaq exchange. However, it spent more than a decade hovering between $2 and $7 per share. With some institutional investors shunning stocks priced below $5 per share, this split is designed to put Sirius XM back on the radar of Wall Street’s smartest money managers.
One of the most attractive aspects of using your money for Sirius XM is that it is a legal monopoly. Although it still fights for listeners with traditional radio operators, it is the only company with a satellite radio license. This provides a significant boost to subscription pricing power in the long term.
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