Amazon shares popped after the tech giant announced a 20-for-1 stock split, its first since the dot-com boom, and Bank of America believes the move could inspire other companies with hefty share prices to follow suit.
Stock splits are often intended to increase liquidity and lure more interest from regular investors. A stock split theoretically could boost retail share ownership as the cheaper stock price is more accessible to a wider range of investors. However, it doesn't change a company's underlying fundamentals or the intrinsic value of its shares.
Stocks that have split on average climbed 25% over the next 12 months, versus 9% gains for the S&P 500, according to the Wall Street firm.
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