Walmart’s shares experienced a rise on Monday following a rare stock split. This strategic move is aimed at broadening the investor base as the retail giant continues to surge towards its highest-ever valuation.
Walmart executed a 3-1 stock split effective Monday, a decision made public on January 30th.
As a result of the split, existing shareholders saw their shares triple in quantity while the price per share decreased by two-thirds. This adjustment maintained Walmart’s total shareholder equity, even as its stock price dropped from $175.56 to $58.52 as of the closing price on Friday.
Following the company’s first stock split in 25 years, Walmart’s shares showed robust performance on their first day of trading.
The stock experienced nearly a 2% increase, reaching approximately $59.60 by early afternoon. This figure was just short of its split-adjusted intraday record high, briefly surpassing $60 the previous week, and moving towards its highest-ever closing level.
Prior to the stock split, the Walton family, the wealthiest family in the United States and descendants of Walmart’s founder Sam Walton, divested a portion of their Walmart holdings.
Regulatory filings, disclosed on Friday afternoon, revealed that a Walton family trust sold slightly over $1.5 billion worth of Walmart shares between Wednesday and Friday.
Despite the sale, the Walton family retains ownership of over 40% of Walmart shares.
In Monday’s trading session, major stock indexes and retail stocks experienced minimal movement, with Walmart standing out as an exception due to its upward trajectory. The surge in Walmart’s stock price coincided with reports of the federal government’s intention to oppose the merger of grocery giants Kroger and Albertsons. Consequently, shares of Kroger, headquartered in Ohio, dipped by 1%.
Walmart had previously announced in January its decision to split its stock, primarily aiming to lower the barrier of entry for its employees interested in purchasing Walmart shares. However, the resultant decrease in share price also facilitates outside investors in acquiring full shares of the company.
With a market capitalization of approximately $480 billion, Walmart holds the distinction of being the largest American company by total revenues and ranks 14th among the most valuable American firms.