In February 2024, Walmart (WMT) plans to implement a three-to-one stock split. This action, scheduled to take place on 23 February 2024, will result in an increase in the number of shares for stockholders. That means, shareholders will be granted two additional shares for each existing share they hold.
The purpose behind this move is to facilitate employee participation in purchasing company shares. Following the stock split, Walmart shares will commence trading on a post-split basis starting on 26 February 2024, while retaining the WMT symbol.
Currently, about 4,00,000 employees are part of a stock-purchase programme, allowing them to buy shares through payroll deductions, with a 15 per cent company match on the first $1,800 spent each year.
Walmart has decided to split its stock to make it easier for its employees to buy shares. This means, after the split, there will be around 8.1 billion shares available.
On 30 January 2024, this decision came as Walmart’s stock price closed at $165.59, showing a four per cent increase in 2024 and coming close to the all-time high in November. Companies often split their stocks when the price gets too high, making it seem expensive.
The stock split will reduce Walmart’s share price to about a third of its cost before the split, but it won’t change the overall value of the company.
Although the split won’t affect Walmart’s market capitalisation, it may make the stock seem more affordable to small investors because of the lower price.