Shares of America Online (Nasdaq: AOL) are up 3-5/8 to 130 in early trading today, one day after the company announced a two-for-one stock split. AOL made the announcement after the markets closed on Thursday, and the stock saw a boost in after-hours trading.
The stock split will take place on November 22 and be payable to shareholders of record on November 8. This will be AOL’s second stock split this year and seventh overall since the company went public in 1992.
It has been said before, but it is worth saying again: A stock split logically shouldn’t change the value of a company. It is simply the equivalent of cutting a pie into smaller pieces. Investors these days, however, seem to love stock splits.