Why publicly-listed companies should split their stock

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In today’s financial landscape, retail investors are turning to equity markets, driven by concerns over the sufficiency of state pensions and income growth (Gempesaw, Henry, & Velthuis, 2022). At the same time, institutional investors must increasingly adhere to stringent regulations on the liquidity of their investment portfolios (for example, the European Insurance and Occupational Pensions Authority, 2024 and the Securities Exchange Commission, 2025). These dynamics have prompted investors to rethink their investment strategies and reconsider their direct exposure to equities, underscoring the growing importance of having easy to access equity markets.

According to the World Federation of Exchanges (2025), there are currently 54,634 different companies listed on one or multiple stock exchanges. Stock exchanges offer these publicly-listed companies a venue to raise capital and open up their investor base to retail and institutional investors alike. Some publicly-listed companies have a low nominal stock price and are easy to trade, while others have large stock prices, sometimes in the thousands of dollars or euros, or have very illiquid equity, rendering it virtually impossible for market participants to invest in them after the initial listing on the exchange.

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