Walmart Inc. shares rose 1% in the extended session Tuesday after the retail giant announced a 3-for-1 stock split.
The decision is part of Walmart’s
WMT,
“ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach,” the company said.
As of late Tuesday, Walmart’s stock ranked as the 175th-highest in price, and was the 17th-largest Dow Jones Industrial Average
DJIA
component. Based the new split-adjusted price, it would rank as the 25th-largest stock in the Dow.
More than 400,000 employees currently participate in the company’s stock purchase plan, which allows eligible workers to buy stock through payroll deductions and get company matches in some cases.
“Given our growth and our plans for the future, we felt it was a good time to split the stock and encourage our associates to participate in the years to come,” Chief Executive Doug McMillon said in a statement.
Walmart has sweetened the perks for some of its employees in recent weeks, recently allowing its U.S. store managers to receive up to $20,000 in Walmart stock grants every year.
The shares to be issued in the stock split will be payable after market close on Friday, Feb. 23, to shareholders of record at the close of business on Feb. 22.
Shareholders will receive two additional shares of common stock for each share held, and Walmart’s stock will begin trading on a post-split basis at the market open on Feb. 26.
The company expects that the stock split will increase the number of Walmart’s outstanding stock to about 8.1 billion shares, from around 2.7 billion shares.
Walmart stock has gained 16% in the past 12 months, compared with an advance of about 14% for the Dow in the same period.
This story originally appeared on Marketwatch
