📈 The secret behind stock splits

PLUS: Inflation conundrums, FAA memes, paper computer models, and more. [The Hustle] Between 1959 and 1962, artist Yves Klein sold invisible “zones of empty space” in exchange for gold bullion. All buyers got was a receipt, which they were encouraged to burn as Klein dumped ½ his payment in a river. Sotheby’s, which just auctioned off a rare remaining receipt for $1.2m, said some see it as an “ancestor of the NFT.” In today’s email: - Splits, explained: As in stock splits. Not banana. - Uh-oh: Why thinking about inflation leads to more inflation. - Air rage: The FAA issued highest-ever fines to unruly flyers. - Around the web: TikTok’s most popular songs, writing tools, DIY computer crafts, and more cool internet finds. 🎧 On the go? [Listen to today’s podcast]( to hear Steph Smith discuss creator economies in the metaverse, plus, dwindling Kmarts. The big idea [Shopify logo split into pieces]( Why do companies do stock splits? On Monday, Shopify [announced]( its plans for a 10-for-1 stock split to make share ownership more accessible. So, uh, what’s that? For starters, the financial maneuver [doesn’t change]( the market capitalization of a company — just its number of outstanding shares. For example, say you own one share of a company’s stock at $1k per share. A 5-to-1 stock split would give you 5 shares at $200 per share. Math! But why are companies like Tesla, Amazon, and Alphabet all doing it? Historically… … companies have issued stock splits to increase trading volume when their stock price has gotten too high. Examples include: - Apple issuing a 4-to-1 split in 2020 ($500 to $125), leading to a spike in trading among retail investors (AKA regular people). - Berkshire Hathaway issuing a 50-to-1 split for its Class B shares in 2010, resulting in a [boost in liquidity]( (trading shares became cheaper and faster). This boost made it eligible for the S&P 500. But these days, trading platforms like Robinhood allow investors to buy fractional shares of a stock (for example, ¼ of a share), making share price less important. With that in mind, Virginia Tech finance professor Derek Klock says stock splits are a psychological play — a way for a company to tell the market it expects its stock to keep going up. Warren Buffett once said… … stock splits are irrelevant, comparing the move to [cutting a pie]( into more pieces. But the data seems to prove it works: - Tesla, Google, and Amazon all saw net purchases [double]( after announcing splits. - Plus, research from [Nasdaq]( found that simply announcing a split leads to a 2.5% increase in share price, and companies that issue splits beat the market by ~5% in one year. Bonus: Here’s a boppy old-school [stock rap](. “A company is kinda like a pie (pie!), a stock is a slice that you buy (buy!).” [Share on Facebook]( [Share on Twitter]( [Send as email to a friend](mailto:?subject=The%20Hustle%20wrote%20something%20I%20think%20you%27ll%20like...%0A&body=Why+do+companies+do+stock+splits%3F%0Ahttps%3A%2F%2Fthehustle.co%2F04132022-stock-splits%3Futm_campaign%3Dstock%2Bsplits%26utm_content%3D04132022-stock-splits%26utm_medium%3Demail%26utm_source%3Ddaily%0A%0AYou%20can%20subscribe%20with%20my%20link%20here%20to%20get%20the%20latest%20in%20tech%20and%20business%20daily:%0A [View on our website]( SNIPPETS Meta market: Creators will be able to [sell stuff]( in Meta’s VR platform Horizon Worlds, like virtual items or access to experiences. Kinda like Roblox. Yikes: The Bureau of Labor Statistics’ Consumer Price Index (CPI) rose [8.5%]( YoY. That’s the biggest inflation jump since December 1981, when the top song was Olivia Newton-John’s “Physical” and Raiders of the Lost Ark ruled the box office. Yikes again: After CNN invested [$300m]( into CNN+ — with plans for $1B total over 4 years — the service has fewer than [10k]( daily users 2 weeks after launch. Speaking of streamers with a “+”... Hey, soccer fans: FIFA [launched]( a new soccer streaming service called FIFA+ with live soccer games, documentaries, archived matches, and more. It’s currently free with ads. New hire: Disgraced Activision Blizzard [hired]( Kristen Hines, formerly of Accenture, as its new DE&I officer, responsible for overseeing diversity in the office and in the company’s games. 🎧 Surprisingly, our voices are bearable. The Hustle Daily Show is currently one of Amazon Music’s [“Best Podcasts This Week.”]( --------------------------------------------------------------- Hey — enjoy getting quick updates on what you care about? Take [20 seconds]( to personalize your Snippets. Pick your preferences👇 and we’ll send you more of what you love. Boom. [Personalize my Email →]( uh-oh [Inflation chart]( Zachary Crockett Why thinking about inflation leads to more inflation When thinking about a problem is, in itself, a problem, you’ve got a problem. Some context: In March, inflation was up [8.5%]( YoY. The average American is expected to need an [additional ~$5k]( this year to live the same life they did last year, and many Americans lack confidence in current economic policies to fight inflation. What’s worse — if people and businesses just expect inflation to continue into the future, inflationary psychology could take hold and lead to even higher prices, salaries, and spending. Here’s how. [Read the full story →]( Free Resource 8 steps to launching your own NFT The value of the NFT marketplace last year? $41B. If you’ve ever wanted a slice of that lucrative pie, and then got quickly humbled, we feel you — NFTs, crypto, and blockchain can feel like a wild digital west. Thankfully, our HubSpot content creators are filtering all the buzz for us. Watch a great speaker explain [how to make a top-selling NFT in 8 steps](. Featured in this video: - WTF is an NFT? - How to upload, pitch, price your NFTs - Popular types of NFTs (e.g., art, music, collectibles) - Instagram’s top 12 NFT hashtags in 2021 - How to storytell your brand - Can you sell NFTs without a marketplace? - What are NFT collections (like [CryptoPunks]( and [Bored Ape Yacht Club]()? Subscribe to HubSpot Marketing on YouTube for more heat. [How to make NFTs →]( Sky-high Fines [flight departures]( Flight execs are ready for mask mandates to end A lot of places have loosened restrictions on masks — but not planes, trains, or buses. In March, TSA [extended]( mask mandates for transit until April 18, per CDC recommendations. But as the new expiration date approaches, there’s been some turbulence. Is it really ending? Maybe? On the “Today” show, White House covid response coordinator Dr. Ashish K. Jha [said]( the CDC was developing a “scientific framework” for masks on transit, and that an extension is “absolutely on the table.” Airline execs really want the mandate to end On March 23, several sent [a letter]( to the White House arguing that extended mandates make “no sense” when people are unmasked in restaurants and schools. Plus, crews are tired of enforcing it. Of all 5.9k+ unruly passenger reports in 2021, ~72% involved masks, [per]( the FAA. Recently, the FAA issued record-high fines… … against [2 unruly passengers]( at $81.9k and $77.2k, respectively, for incidents in July 2021. Why so high? The FAA can issue fines up to [$37k per violation]( — and they can stack. One traveler allegedly threatened, hit, and spit at flight attendants; the other is accused of trying to kiss her seatmate and biting another passenger. Those aren’t entirely about masks — though they probably would have helped with the kissing and spitting — but you can bet more fines are en route: - In January, a Delta passenger who refused to wear his mask allegedly [mooned]( a flight attendant and threw a can at another passenger. - Last year, a woman [pleaded guilty]( to punching a flight attendant in the face after being told to buckle her seat and fix her mask during a Southwest flight. BTW: We’ve said this before but still can’t believe the FAA [made memes]( to convince people to behave on planes. [Share on Facebook]( [Share on Twitter]( [Send as email to a friend](mailto:?subject=The%20Hustle%20wrote%20something%20I%20think%20you%27ll%20like...%0A&body=Flight+execs+are+ready+for+mask+mandates+to+end%0Ahttps%3A%2F%2Fthehustle.co%2F04132022-flight-mask-mandates%3Futm_campaign%3Dstock%2Bsplits%26utm_content%3D04132022-flight-mask-mandates%26utm_medium%3Demail%26utm_source%3Ddaily%0A%0AYou%20can%20subscribe%20with%20my%20link%20here%20to%20get%20the%20latest%20in%20tech%20and%20business%20daily:%0A [View on our website]( AROUND THE WEB 🎸 On this day: In 2000, Metallica [sued]( Napster for letting people download its music for free. Metallica won. Napster went bankrupt. 🎵 That’s cool: [Tokboard]( lets you see and play the week’s most-viewed songs on TikTok. ✏️ Useful: [Instoried](, which recently closed a $10m funding round, is a tool that helps you write more original, impactful, and empathetic content. 🖥️ Cure boredom: Artist Rocky Bergen made several [paper computer models]( that you can download, print, fold, and glue yourself. 🐦 Aww: And now, look at how cute [European robins]( are. Meme of the day [types of splits meme] It’s gonna be banana for me. (Source: [imgflip.com]() SHARE THE HUSTLE Hey. Stop keeping us a secret. Refer just 3 people and we’ll start to send some goodies as a thank you. [My First Million ebook]( Spread the news. Help us grow 🌱 [Share The Hustle 🤠→]( Or copy this custom referral link: [ Your referral count: 0 How did you like today’s email? Today's email was brought to you by [Jacob Cohen](, [Juliet Bennett Rylah](, and [Rob Litterst](. Editing by: Jennifer “Banana split fan” Wang. 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