Walmart stock split rare past 20 years

Walmart's decision to split its stock has sparked a debate. High-profile tech companies have also split stocks, with positive results.

Walmart's recent decision to split its stock 3-for-1 has reignited the age-old debate about when is the right time to split a stock. The practice of stock splits has become increasingly rare in recent decades, largely due to the dominance of institutional investors in the market. These investors typically invest based on dollar value rather than the number of shares, making the price of individual shares less relevant to them.

However, the surge in tech stock prices in recent years has led to a number of high-profile stock splits in the tech industry, including splits by companies such as Palo Alto Networks, Tesla, Alphabet, Amazon, Nvidia, and Apple. These companies have seen significant growth in their share prices, prompting the decision to split their stocks.

In contrast, Walmart has experienced more modest growth, with its share price increasing by only 60% since 2018, slightly below the overall S&P 500. Despite this, the retail giant has decided to split its stock, citing the potential benefits of increased trading volumes, improved liquidity, and a larger shareholder base as key factors in its decision.

Walmart specifically highlighted the desire to make stock ownership more accessible to its associates and employees as a driving force behind the decision. The company's Associate Stock Purchase Plan currently allows over 400,000 associates to conveniently buy stock through payroll deductions and receive a 15% company match on the first $1,800 each year. By splitting its stock, Walmart aims to increase the ownership base among its associates and employees, aligning with the vision of its founder, Sam Walton, who believed in making stock ownership accessible to all.

In the words of Walmart's President and CEO, Doug McMillon, "Given our growth and our plans for the future, we felt it was a good time to split the stock and encourage our associates to participate in the years to come. As Sam said, 'We're all in this together. That's the secret.'" This decision reflects Walmart's commitment to its associates and the belief that shared ownership is key to the company's success.