Although share splits do not add any value to the company, investors tend to react positively to share splits because management is not likely to initiate a share split if the company's prospects are poor.

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Investors perceive share splits as a sign of optimism from management about the company's future prospects. Therefore, if management initiates a share split, it is likely that investors will interpret it positively and the company's stock price may increase. However, this does not mean that a share split inherently adds value to the company's operations or financial performance.

Although Share Splits Do Not Add Any Value to the Company