Palo Alto Networks (NASDAQ: PANW) recently completed its three-for-one stock split. Tech stock splits have been hot in 2022, even amid a vicious bear market. Companies with high stock prices might be announcing these splits to try and attract investor attention and attract investors who are not as willing to spend large amounts of capital per share.
As for Palo Alto Networks, it hasn't needed much help. Even before the stock split was announced, shares of the leading cybersecurity company were already handily beating the S&P 500. But here's the real reason for the stock split -- and the real reason this company is worthy of your attention.
Companies often split their stock to attract investor attention . In fact, Palo Alto Networks isn't the only cybersecurity company to split this year. Fellow security leader Fortinet (NASDAQ: FTNT) completed a stock split just a couple months prior. There are some additional benefits to stock splits like increasing access to retail investors with a lower share price, although that benefit is dissipating today. Many online stock brokers allow for fractional share purchases , eliminating the need for a company to lower its price per share. Nevertheless, a split announcement tends to generate lots of positive media buzz.
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Palo Alto Networks Stock Split: The Real Reason It Matters