Microsoft (MSFT), a dominant force in the tech industry, has a long history of stock splits. These splits help make its shares more affordable and accessible to a broader range of investors. A stock split occurs when a company divides its existing stock into multiple shares, which lowers the price per share while maintaining the overall value for current shareholders. For example, if you owned one share worth $1,000 and the company announced a 2-for-1 split, you would then own two shares, each valued at $500.
Microsoft stock split history
Here’s a look at Microsoft’s stock split history over the years:
- September 21, 1987 – 1-for-2 split: Each share was split into two, reducing the price per share.
- April 16, 1990 – 1-for-2 split: Again, doubling the shares and halving their price.
- June 27, 1991 – 1-for-1.5 split: Shareholders received one and a half shares for every share owned.
- June 15, 1992 – 1-for-1.5 split: Repeated the same ratio as the 1991 split.
- May 23, 1994 – 1-for-2 split: Split the shares again into two for each held.
- December 9, 1996 – 1-for-2 split: Continued to increase the number of shares available.
- February 23, 1998 – 1-for-2 split: Followed the same approach as previous years.
- March 29, 1999 – 1-for-2 split: Another 1-for-2 split reflecting Microsoft's ongoing growth.
- February 18, 2003 – 1-for-2 split: The most recent split, further doubling the shares.
These splits were aimed at making Microsoft’s shares more affordable for individual investors, broadening its investor base while maintaining its market value.
Will Microsoft split its stock in 2024?
Predicting whether Microsoft will announce a stock split in 2024 requires an analysis of several factors. While stock splits are never guaranteed, Microsoft has historically implemented them when the price of its stock becomes high enough to warrant the move. Currently, Microsoft’s stock price is around $416, which is a significant increase from the $48.30 price per share at the time of the last split in 2003. This sharp rise suggests that conditions may be favorable for another split.
However, stock splits are decisions made by a company’s board of directors, based on various factors, including market conditions, company performance, and shareholder interests. Therefore, while a split in 2024 is a possibility, it is far from certain.
Why might Microsoft consider a stock split?
A stock split could make sense for Microsoft for several reasons:
- Improves accessibility: Lowering the share price through a split makes Microsoft’s stock more affordable to retail investors, potentially increasing liquidity and stabilizing the price.
- Psychological appeal: Stocks with lower prices often seem more approachable to individual investors. Although the company's overall value remains the same, a lower price per share might attract more retail investors.
- Historical precedent: Microsoft has a history of using stock splits as a strategy to ensure its shares remain accessible. Continuing this tradition could help maintain investor interest.
- Employee benefits: For companies offering stock options to employees, a lower share price makes these options more attractive, potentially boosting employee morale and retention.
Conclusion
In conclusion, while it is plausible that Microsoft could consider another stock split due to its high stock price and historical practices, a split in 2024 is not guaranteed. The decision will depend on several factors, including market conditions, company growth, and the interests of shareholders.
For investors, it’s essential to keep an eye on Microsoft’s announcements and the broader market trends. Stock splits don’t affect the company’s fundamental value but can influence market perceptions and dynamics. Whether you’re an existing investor or thinking about buying shares, it’s crucial to stay informed about Microsoft’s future plans.
What better way to welcome you than with a bonus?
Start trading with a $30 bonus on your first deposit.
Terms and Conditions apply
