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Minyan Mailbag: Splits


Yo Jay, Yo Jay---THANKS!



Question for you: The last two times Apple (AAPL) and eBay (EBAY) split not only marked key inflection points for the stock, but were key market tells as well in a broad sense. Any thoughts?

The number of prior stock splits for these companies is too small to draw any conclusion. But we can at least dismiss the notion that an increase in the number of shares results in a sudden decrease in the stock's appeal. As the table below illustrates, Ebay and Apple were higher five days after the split date four of five times. Further out, the performance is far too random for any conclusion. For those interested, I've summarized the performance 30 and 120 days out.

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No positions in stocks mentioned.

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