A high-quality company will typically create tremendous long-term value, sending its stock price soaring into the hundreds or even thousands of dollars. As a result, investors with small portfolios could find themselves priced out of owning one full share, which is why the company might decide to execute a stock split. Stock splits work by increasing the number of shares in circulation, which reduces the price per share by a proportionate amount. The adjustment is entirely cosmetic, so it doesn't change the value of the underlying company. Facebook parent Meta Platforms (NASDAQ: META) just announced it will execute the equivalent of a 2-for-1 split by introducing a new class of shares.
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