Stock split has become really common this year, as eight S&P 500 companies have announced to increase their outstanding shares. Netflix, Inc. (NASDAQ:NFLX) and Kroger Co (NYSE:KR) are the latest companies to announce that they will split their stocks, joining companies like Visa Inc (NYSE:V), Starbucks Corporation (NASDAQ:SBUX), Marathon Petroleum Corp, Ross Stores, Inc., PPG Industries Inc, and CF Industries Holding, Inc.
Stock split is a kind of dividend in the form of additional shares to a company’s existing stockholders, aiming to increase the liquidity of the stock and to make the stock more affordable for its employees and small group of investors. The move indicates that a company has confidence over its future growth.
Netflix, the world’s leading video service provider, said last month that it will undertake a rare 7-for-1 stock split, which was also carried out by the world’s most valuable company, Apple Inc in June 2014. Additional stocks are scheduled to be distributed on July 14 to shareholders on record as of July 02. Post-split stocks will trade on July 15, on which the company will also announce its second quarter earnings of fiscal year 2015 (2QFY15). The upcoming split will be the company’s second split in 13 years.