Every split announcement seems to be rewarded with a rally, despite there being no change to intrinsic value. The only explanation I can think of, is that we are seeing multiple expansion as a reward for increased liquidity due to the influx of small investors. But then again the stock was highly liquid pre-split. Can anyone shed light on this for me?
I share the same sentiment about the announced stock buyback. It’s simply a return of capital and does not create wealth in the slightest (albeit more tax efficient than dividends in many cases).
If anything, this is reassuring for the stock pickers who like the challenge of beating the index. Inefficiency is our friend.
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