Here’s what Walmart’s 3-for-1 stock split means for investors

Walmart (WMT) investors are gearing up for a stock split at the end of this week.

For the 12th time in 50 years, Walmart will conduct a stock split in an effort to make shares more affordable for its employees. Walmart last carried out a 2-for-1 stock split on April 20, 1999. This time, it will be the company’s first 3-for-1 stock split.

Here’s how it will work: Shares issued in the stock split will be payable after market close on Friday, Feb. 23, for investors who own shares of the retailer “at the close of business” on Thursday, Feb. 22. On Monday, Feb. 26, at market open, Walmart will begin trading on a post-split basis.

This split will increase the number of shares of Walmart’s outstanding common stock to approximately 8.1 billion from 2.7 billion shares before the split. Although the stock will trade at a lower price, it won’t change the underlying value of existing investments in the company.

In a note to clients, CFRA analyst Arun Sundaram explained that the action is “purely cosmetic” with no “impact to fundamentals.” However, he noted, stock splits “are perceived as a shareholder-friendly move and a sign of confidence.”

The Walmart company logo is displayed as traders work on the floor of the New York Stock Exchange during morning trading on May 30, 2023, in New York City. (Michael M. Santiago/Getty Images) (Michael M. Santiago via Getty Images)

Why Walmart chose to issue stock now

Walmart CEO Doug McMillon said the timing of the stock split made sense given Walmart’s growth future plans, which it announced at its last annual meeting.

Sundaram pointed to other recent announcements from the company, like a pay increase for store managers from $117,000 per year to $128,000 per year, with bonuses of up to 200% of base salary. Walmart also announced a $9 billion dollar investment to modernize stores, which he said “should help drive traffic and volume growth … and help offset waning average ticket growth.”

Paying homage to founder Sam Walton, McMillon said he wants all employees to feel a part of Walmart’s story, writing in a statement, “As Sam said, ‘We’re…

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