IBM’s stock split history: Why Big Blue stopped splitting shares

Stock splits utilized to beryllium a communal firm practice. According to the CFA Institute Journal Review, the frequence of banal splits began expanding successful the 1920s and peaked successful 1982, erstwhile astir 23% of listed companies divided their shares. Tech titan IBM divided its banal much than a twelve times during that period.

Back then, companies divided their banal erstwhile their stock prices reached “high” levels, usually $100 oregon more, truthful they would beryllium much affordable to idiosyncratic investors.

Today, the emergence of physics trading platforms similar Robinhood and WeBull has made it easier for investors to acquisition fractional shares, and organization investors person accrued wide liquidity, frankincense reducing the request for businesses to divided their stock.

As a result, banal splits are present seen much arsenic symbolic gestures oregon proclamations of success. For instance, some Apple (AAPL) and Nvidia (NVDA) divided their banal aft large stock terms gains.

Stock splits besides usually signify affirmative momentum for a company, and investors mostly respond to a banal divided announcement by buying adjacent much shares.

Still, analysts are speedy to constituent retired that a banal divided does not alteration the full worth of an investor's shares; it lone changes the fig of shares held and the terms of each share.

So portion banal splits were erstwhile a regular portion of firm strategy, they’ve go a acold little communal signifier today. Few companies exemplify that displacement much intelligibly than IBM (IBM), which hasn’t executed a accepted banal divided successful decades.

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IBM has executed much than a twelve banal splits since its founding successful 1911. In fact, if you had purchased 1 stock of IBM earlier May 29, 1973, you would person 20.92 IBM shares today.

Here's a afloat database of the company's banal splits:

Source: IBM

IBM’s banal splits occurred during seasons of expansion, particularly successful the precocious 20th century, erstwhile it dominated the exertion sector.

In 1979, for instance, the institution introduced its 4300 bid processors and precocious colour show terminals, ushering once-bulky mainframe computing powers into mundane workplaces. On May 31, 1979, IBM executed a monolithic 4-for-1 banal split.