Walmart Announces Three-for-One Stock Split, Making Shares More Affordable for Employees
Walmart is making its share price more affordable by announcing a three-for-one stock split. Starting in late February, the split will bring down the price of its shares and make them more accessible for employees, or “associates” as the company refers to them. This move is aligned with Walmart’s vision to allow more employees to purchase full shares, in line with the beliefs of its founder, Sam Walton. The split is the first for Walmart since 1999 and aims to reinvigorate the stock by attracting smaller investors.
Walmart Encourages Employees to Buy Full Shares with Stock Purchase Plan
Through its stock purchase plan, Walmart is encouraging eligible employees to buy Walmart stock with payroll deductions. The company will match these deductions at 15% for the first $1,800 per year. Walmart’s President and CEO, Doug McMillon, believes that by splitting the stock, more employees can participate in the company’s growth and plans for the future. This move aligns with Walmart’s commitment to maintaining a range of share prices that are accessible to all associates.
Retail Investor Activity Increases as Gen Z Investors Seek to Offset Inflation
Retail investor activity has seen an increase, fueled in part by the stock market’s strong performance in 2023 and better-than-expected December jobs numbers. Gen Z investors, who often have less money to trade, may be attracted to Walmart’s stock following the split. A Bankrate survey conducted in August found that nine out of ten young investors actively trade, partly to offset inflation. Walmart’s stock split could provide an opportunity for these investors to participate in the market.
Walmart’s Stock Performance Shows Growth Potential
Walmart’s stock has experienced a 15% increase over the past 52 weeks as the company has strengthened its online shopping services and announced higher pay for employees. The recent announcement of opening 12 new stores and converting a smaller location to a Supercenter signals impending growth. With the stock split news, Walmart’s stock saw a modest increase of just under half-a-percent on Wednesday.
Walmart Boosts Employee Compensation to Attract and Retain Talent
In a competitive labor market, Walmart is increasing starting wages for workers and adding new perks for managers. Store managers are now eligible for five-digit annual stock grants, a benefit usually reserved for higher-level employees. Combined with a higher average salary of $128,000 and the potential for double pay through bonuses, high-performing store managers could earn up to $400,000 per year. Walmart recognizes the complexity and significance of the store manager role in today’s business environment.
Analyst comment
Positive news: Walmart Announces Three-for-One Stock Split, Making Shares More Affordable for Employees
As an analyst: The stock split will attract smaller investors and increase retail investor activity, particularly from Gen Z investors seeking to offset inflation. This could lead to increased demand for Walmart stock and potentially drive its market value higher.
