Walmart’s stock split shows how rare it has become in past 20 years

However, most of these companies experienced significant share price growth in recent years. Walmart, on the other hand, has seen more modest growth, with its share price up only 60% since 2018, slightly below the overall S & P 500. What effect does a stock split have on trading? A 2022 academic study found several positive benefits: 1) Trading volumes increase. 2) Liquidity improves (liquidity is the ability to trade a large quantity of shares without affecting the price). 3) Stock splits expand the shareholder base for the company. These academic findings likely influenced Walmart’s decision. Walmart specifically mentioned these factors in its announcement of the split: “The stock split is part of Walmart’s continuous evaluation of optimal trading and spread levels and its desire for its employees to feel that purchasing shares is easily within reach. More than 400,000 employees participate in Walmart’s Associate Stock Purchase Plan today, which allows eligible employees to conveniently buy stock through payroll deductions and offers a 15% company match on the first $1,800 each year.” Increasing ownership among Walmart associates and employees appears to have been a particularly strong motivating factor. Doug McMillon, President and CEO of Walmart, stated, “Sam Walton believed it was important to keep our share price in a range where purchasing whole shares, rather than fractions, was accessible to all of our associates. 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.'”