Still, a stock's share price tends to get a boost from a split. It's a bit of a gamble to purchase shares of a company only because they are going to split, but if you are planning to buy a stock and it happens to announce a split, it's usually best to buy before the new shares are issued. According to a study of 1,275 stocks that split from 1975 to 1990, within a few days of a split announcement stocks outperformed the market by an average of 3.5 percentage points. But even if you miss the initial pop, it's still better to get in before, rather than after, a split. The upward price trend continues over the following year, with split stocks outperforming their nonsplit peers by another eight percentage points on average, he says.
Stocks also tend to spike on the day they split.
If the share price is moving toward the high end of that range and the company thinks it will go even higher, the company may decide to split the stock. The Kiplinger Washington Editors, Inc.