Microstrategy’s board of directors has announced a 10-for-1 stock split of Microstrategy class A common stock and class B common stock. They have done this to make stock more accessible to investors and employees.
Companies do a stock split to simply divide their existing stocks in the market by increasing the number of shares in a company.
Microstrategy Stock Split to Aid Growth?
In this case, a 10-for-1 split would mean that each investor will own ten times the number of shares, while the worth of the share would be reduced by 10 times. This however does not affect one’s portfolio or the company’s market capitalization.
A stock split causes a decrease of market price of individual shares, but does not change the total market capitalization of the company: stock dilution does not occur.
The stock split will be effected using a stock dividend to the holders of record of MicroStrategy’s class A common stock and class B common stock as of the close of business
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