{"id":467110,"date":"2021-05-19T04:11:04","date_gmt":"2021-05-19T08:11:04","guid":{"rendered":"https:\/\/financhill.com\/blog\/?p=467110"},"modified":"2021-05-12T15:37:22","modified_gmt":"2021-05-12T19:37:22","slug":"will-ko-stock-split","status":"publish","type":"post","link":"https:\/\/financhill.com\/blog\/investing\/will-ko-stock-split","title":{"rendered":"Will KO Stock Split?"},"content":{"rendered":"

Will KO Stock Split?<\/em> Many traders are wondering whether one of the biggest blue-chip firms is going to cut its share price in half later this year. What’s up with Coca-Cola (KO<\/a>)<\/strong> anyway?<\/p>\n

Coca-Cola is a company that almost all of us recognize as a household name. As a leader in the cola wars for decades, it has produced staggering gains \u2013 a $40 share bought at the IPO in the earliest parts of the 20th century would now bring many thousands of dollars.<\/p>\n

With that in mind, let’s look at some of the expectations around this leading stock for the year ahead.<\/p>\n

Why Do Stocks Split?<\/h2>\n

In many ways, a stock split is more a cosmetic procedure than anything else. When companies split a stock, they often do it to make shares more affordable to small investors.<\/strong><\/p>\n

They may also do it to align their share price with the prices of competitors. In other words, if you can buy alternative soda stocks for $5 or $10 a piece, but Coca-Cola’s stock is up at $200 or $300, the management team may decide it’s time to issue double shares, to cut that stock price in half.<\/p>\n

Nothing about the valuation of the company is changing \u2013 the change is on paper, where single shares are now double and each one has half of its prior value.<\/p>\n

Is A Stock Split Good Or Bad?<\/h2>\n

Although some would argue that a stock split is good because it makes shares more affordable, nothing is really changing in terms of the value of what you’re holding. You’re simply able to by double the number of shares for the same amount of money. The shares are worth half of what they were before.<\/p>\n

As for the downside, stock splits can be confusing to investors who aren’t continually paying attention. When someone doesn\u2019t see a share split in a historic chart, that can introduce misinformation in investing research. Stock splits can also introduce more transactions as more people are suddenly qualified to play.<\/strong><\/p>\n

It’s also worth noting that stock splits to make shares affordable are even less practical in the age of fractional investing<\/strong>, where platforms issue tokens helping small traders to buy pieces of an individual stock or cryptocurrency.<\/p>\n

Will KO Stock Split?<\/h2>\n

To look at the likelihood of Coca-Cola stock splitting this year, let’s look at the history.<\/a><\/p>\n

With a historic chart going back to the middle of the last century, we see that Coca-Cola stock made two 2-1 splits in the 1960s, and one 2-1 split in the 1970s.<\/strong><\/p>\n