Walmart Inc. announced a 3-for-1 Walmart stock split to make its shares more affordable and attractive for its employees and investors. The Split will also change its ranking in the Dow Jones Industrial Average, currently the 17th-largest component. The company has also increased the benefits for its store managers and employees participating in its stock purchase plan.
Walmart Stock Split Announcement
Walmart Inc. announced a 3-for-1 Walmart Stock split on Tuesday, sending its shares up 1% in after-hours trading. The company said the Split was part of its continuous evaluation of optimal trading and spread levels and aimed to make share ownership more accessible for its associates.
The last time Walmart split its stock was in 1999 when it did a 2-for-1 split. Since then, its share price has increased more than fivefold, reaching a record high of $153.66 in December 2023. The Split will reduce the share price to about $51, making it more affordable for retail investors and employees who want to buy or sell the stock.
The Split will also affect Walmart’s valuation and market share. As of late Tuesday, Walmart had a market capitalization of about $437 billion, making it the ninth-largest company in the U.S. by market value. The Split will not change its market value, but it will increase the number of shares outstanding from about 2.7 billion to about 8.1 billion. Each share will represent a smaller percentage of the company’s ownership and earnings.
The Split will also affect Walmart’s ranking in the Dow Jones Industrial Average, where it is currently the 17th-largest component. The Dow is a price-weighted index, which means that the higher the share price, the more influence the stock has on the index’s movement. The Split will lower Walmart’s share price and reduce its weight in the index. Based on the new split-adjusted price, Walmart would rank as the 25th-largest stock in the Dow, behind companies like Coca-Cola, Nike, and McDonald’s.
Walmart Stock Purchase Plan for Employees
The company’s stock purchase plan has more than 400,000 participants, who can buy shares through payroll deductions and receive matching contributions in some cases. Chief Executive Doug McMillon said in a statement that the Split was a way to reward and motivate the associates for the company’s future growth.
The stock split will make it easier for Walmart’s employees to buy and sell shares through the stock purchase plan, as they will need less money to buy a share or receive more when they sell a share. The Split will also increase the number of shares that employees can receive as matching contributions from the company, boosting their savings and wealth.
The stock purchase plan is one way that Walmart has been trying to improve the compensation and benefits for its workers, especially amid the pandemic and the competitive labour market. Walmart has also enhanced the benefits for some of its employees recently, giving its U.S. store managers up to $20,000 in Walmart stock grants every year. The company has also raised its minimum wage to $15 an hour for some workers and offered bonuses and incentives for others.
Walmart Stock Grants for Store Managers
Walmart has also enhanced the benefits for some of its employees recently, giving its U.S. store managers up to $20,000 in Walmart stock grants every year. The company said the stock grants are part of its strategy to retain and attract talent and align the managers’ interests with those of the shareholders.
The stock grants are based on the store’s and the manager’s performance and vest over four years. The managers can sell or keep the shares as part of their long-term investment. The company said the stock grants are in addition to the competitive salaries, bonuses, health benefits, and retirement plans that it offers to its store managers.
Walmart has about 4,700 stores in the U.S. and employs approximately 1.5 million workers. The company said it has invested more than $5 billion in the past two years to increase the wages and benefits of its U.S. workforce. It has provided more than $2.8 billion in quarterly and special bonuses to its U.S. workers since the start of the pandemic.
Walmart Stock Split Details and Performance
The stock split will be effective after the market closes on Friday, Feb. 23, for shareholders of record as of Feb. 22. Shareholders will get two extra shares of common stock for each share they own. Walmart’s stock will start trading on a split-adjusted basis on Feb. 26.
The stock split is expected to positively impact Walmart’s stock performance, attracting more investors and increasing the stock’s liquidity and trading volume. The Split will also signal the confidence and optimism of the company’s management and board of directors in its prospects and growth potential.
Walmart stock has risen 16% in the last 12 months, outperforming the Dow’s 14% gain in the same period. The company has benefited from its strong e-commerce growth, expansion into new markets and segments, and resilience and adaptability during the pandemic. The company has also invested in innovation, technology, and sustainability to enhance its customer experience and competitive edge.