A Split With a Catch

Snap accompanied its earnings with an unorthodox announcement. The company said it planned to split its stock, but only if shares reached $40. That's a big if, given that Snap closed today's session at $16.35, before falling to $12 in late trading. Barron's Connor Smith has more on the split plan here. Stock splits have been a popular topic for retail investors in the last year, even though they add no fundamental value to a company. Remember, a stock split is just like cutting a pie in 16 rather than eight slices. In the end, it's the same pie.  That isn't stopping GameStop from jumping on the stock-split bandwagon. The meme-stock pioneer officially split its stock four-for-one after the close of trading today. For those keeping track, Connor writes: "GameStop stock closed at $153.47 on Thursday, so the price would be $38.37 on a split-adjusted basis." He adds:  Even on a split-adjusted basis, the stock would be far above where most analysts expected GameStop would trade back in 2020—and even in 2021. The stock was trading at less than $3 early in the pandemic, but jumped in August 2020 when Chewy co-founder Ryan Cohen unveiled a stake. He joined the board in January 2021, kicking off a flurry of buying among retail investors exchanging tips on the stock on Reddit. That price surge forced investors who had bet against the stock to close their positions in an epic squeeze that throttled some hedge funds. GameStop shares peaked at $347 in January 2021. My colleague Nicholas Jasinski wrote more about the folly of stock splits back in April:  Ultimately, the love from the market is more a symptom of stocks’ success than a result of their split plans. Companies that do splits tend to do so because their stocks have already risen a lot lately. And stocks with positive momentum are wont to continue rising. You can read Nick's full story here.