CNBC’s Jim Cramer said Wednesday on his "Mad Money" show.” data-reactid=”19″>A stock split doesn’t change a company’s fundamentals in theory, but the move will attract retail investors who were otherwise limited to low-dollar stocks, CNBC’s Jim Cramer said Wednesday on his “Mad Money” show.
AAPL) CEO Tim Cook and Tesla Inc (NASDAQ: TSLA) CEO Elon Musk got it right when they announced their respective stock splits, Cramer said.
The stock “price tag matters” with the young generation, and companies need the young demographic investor group to be counted as shareholders, the CNBC host said.
“We know what happens after the split,” he said. “This new cohort of investors, the ones who love low-dollar amount stocks, will start buying and holding these best-of-breed names rather than the darned penny stocks.”
Mega-cap companies are “ignoring” the small investor, and Cramer said doing so is a mistake. After all, retail investors are often “more stable shareholders” compared to hedge funds that are known for offering “no loyalty,” he said.
Apple Shares Breach 0 After Tech Giant Announces Record Quarter, Stock Split” data-reactid=”41″>Apple Shares Breach 0 After Tech Giant Announces Record Quarter, Stock Split
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