# Stock Splits: Why They Pump (and Sometimes Don't)
NVIDIA's 10-1 split in June 2024 wasn't just a number game. At $1,200+ per share, retail traders were locked out. Post-split at $129? Suddenly affordable. But here's the wild part: **stock splits historically drive 25-30% returns in the first 12 months**, crushing the S&P 500's average 10-12% gain.
Why? Pure psychology. Lower price = more accessible = more buying pressure = price goes up. The company's market cap doesn't change, but investor behavior sure does.
**But it's not guaranteed.** Tesla's 3-1 split (Aug 2022) at $288/share? Down 18% a year later. Amazon's crazy 20-1 split (June 2022)? Only ~2% returns. Apple nailed it with a 4-1 split in 2020, posting 16% gains by the next year.
The takeaway: A split signals company confidence and unlocks retail money, but it's not a golden ticket. Performance still depends on the actual business fundamentals. Don't FOMO into a split just because the stock got cheaper.
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# Stock Splits: Why They Pump (and Sometimes Don't)
NVIDIA's 10-1 split in June 2024 wasn't just a number game. At $1,200+ per share, retail traders were locked out. Post-split at $129? Suddenly affordable. But here's the wild part: **stock splits historically drive 25-30% returns in the first 12 months**, crushing the S&P 500's average 10-12% gain.
Why? Pure psychology. Lower price = more accessible = more buying pressure = price goes up. The company's market cap doesn't change, but investor behavior sure does.
**But it's not guaranteed.** Tesla's 3-1 split (Aug 2022) at $288/share? Down 18% a year later. Amazon's crazy 20-1 split (June 2022)? Only ~2% returns. Apple nailed it with a 4-1 split in 2020, posting 16% gains by the next year.
The takeaway: A split signals company confidence and unlocks retail money, but it's not a golden ticket. Performance still depends on the actual business fundamentals. Don't FOMO into a split just because the stock got cheaper.