Key Points
- Excitement surrounding stock splits in prominent Wall Street companies is captivating the attention of investors.
- The benchmark S&P 500 is bidding adieu to Walgreens Boots Alliance and welcoming a business that’s a favorite among retail investors.
- Every relevant key performance indicator for this new stock-split stock is growing by a double-digit percentage on a year-over-year basis.
- 10 stocks we like better than Interactive Brokers Group ›
What qualified Interactive Brokers for S&P 500 inclusion?
Why did Interactive Brokers complete its first stock split?
How has automation driven Interactive Brokers’ competitive advantage?
What do Interactive Brokers’ current growth metrics indicate?
For much of the last 30 years, investors have had a next-big-thing innovation to captivate their attention. But in rare instances, two or more hyped trends can coexist. Though the rise of artificial intelligence (AI) is the primary headline-grabber at the moment, investor euphoria surrounding stock splits in high-profile companies comes in a close second.
A stock split is an event that allows a publicly traded company to cosmetically adjust its share price and outstanding share count by the same factor. The “cosmetic” aspect of these changes has to do with stock splits having no effect on a company’s market cap or its underlying operations.
But although these changes are superficial, they’re often viewed very differently by investors on Wall Street. Reverse splits, which are designed to increase a company’s share price, are typically viewed as a situation to avoid by investors. Businesses that need to increase their share price are often doing so to avoid delisting from a major stock exchange and may be operating from a position of weakness.
In comparison, investors almost always gravitate to companies announcing and completing forward splits. This type of split reduces the share price (and correspondingly increases the share count) to make it more nominally affordable for retail investors who can’t purchase fractional shares with their broker. Generally, if a business needs to reduce its share price to make it more “affordable” for everyday investors, it must be doing something right from an operating standpoint.
To date, three prominent companies have announced and completed a forward stock split in 2025. One of these high-flying stocks — which has gained just shy of 300% over the trailing-three-year period — is becoming the newest member of the benchmark S&P 500 (SNPINDEX: ^GSPC), effective as of the start of trading today, Aug. 28.
The newest member of the benchmark S&P 500 completed its first-ever stock split this year
The phenomenal business that’s forever changing the broad-based S&P 500 is automated electronic brokerage firm Interactive Brokers Group (NASDAQ: IBKR).
