Sandisk Is Splitting Its Stock 8-for-1. History Says What Usually Happens to Stocks After a Split Announcement.
Does the flash memory company look like the split stocks that kept climbing?
Sandisk announced an eight-for-one stock split on Thursday, Oct. 29, with adjusted trading set to begin on Nov. 20. The move comes as the flash memory company posted a 23% growth in its fiscal first-quarter revenue to $11.0 billion. Historically, stocks that announce splits tend to perform well in the year following the announcement.
Of eight notable splits examined, five stocks rose one year later, with the median stock gaining around 26%. Nvidia's stock rose by 40% in the year after its 2024 split, while Apple's increased by 52%. The results varied greatly, from a 43% drop to a 79% gain, with most stocks outperforming the S&P 500. However, the outcome appears to depend more on the stock's starting point and the broader market trends.
Sandisk's stock is currently trading 43% below its 52-week high, which is a lower starting point than the eight stocks examined. With slowing growth and a high stock price relative to earnings, Sandisk might be more similar to Amazon and Netflix in 2022 and 2025, which also announced splits from below their highs, rather than stocks that split near their all-time highs.
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