No Stock Split Has Occurred at Ford Motor Company

No stock split has occurred at Ford Motor Company in the previous 28 years. Will we soon witness one?

Recent Stock Split News Regarding Ford

After market hours on March 9, 2022, Amazon Inc. shocked everyone by announcing a 20:1 stock split. The final stock split for Amazon, which had been long overdue, occurred in 1999.

Although it will take effect right away, the shareholder vote is due on May 25, 2022, and if approved at that meeting, it is anticipated to begin trading after the split on June 6 of that year.

Many large corporations, including Tesla, Apple Inc., and Alphabet (parent company of Google), have recently announced stock splits, and it appears that stock split competition is once again present after more than two decades, as it did from the early 1990s to 2000.

The important thing to remember in a stock split situation is that post-split, no investor’s total ownership changes. Additionally, the share split had no impact on the market capitalization of that particular company. 

From the aforementioned two points, it would appear that a share split would be a non-consequential event and that it would not affect the share price in any way other than dividing it in the split ratio.

After all, the ownership of the company (pizza) remains the same whether you have a large pizza or just a few of its different slices with you. But this logic has repeatedly been shown to be false, at least in the case of large corporations.

For instance, when Amazon Inc. recently announced a share split, its share price increased the following day by almost 6% in the erratic market share. 

Although a share split technically has no impact, it does add sentimental value by making shares more accessible to retail investors, which more often than not leads to an increase in share prices after the split.

Ford Motors Inc

Has been one of the market’s pioneers ever since it made its NYSE debut on March 19, 1982. In order to adapt to the needs of the time, it has been actively manufacturing EVs. 

With the first stock split occurring in 1962 and the most recent one in 1994, it has a history of stock splits. The stock split is tabulated below for reference.

History of the Ford Stock Split

Date Ratio Price (Close) Price the day before Change

July 6, 1994 2:1 28.87 57.87 (July 5) -0.22%

Jan 13, 1988 2:1 39.37 79.38 (Jan 12) -0.81%

Jun 3, 1986 3:2 54.25 80.75 (Jun 2) 0.77%

Dec 2, 1983 3:2 41.50 62.88 ( Dec01) -1.00%

Jun 27, 1977 5:4 46.75 57.63 (Jun 24) 1.40%

May 31, 1962 2:1

Following is a list of conclusions drawn from Ford Motor Company’s past:

Ford Stock Split: A String of Splits Over a 20-Year Period

The first split was announced by Ford in 1962, and the second split followed 15 years later in 1977. But between 1977 and 1994, a period of fewer than 17 years, the company announced five splits. 

As can be seen from the table above, Ford has announced stock splits every five to six years over the past two decades. But now that it has been nearly 28 years since the last split, management is remaining silent on the subject.

Mixed Reactions Following the Ford Stock Split

In general, it is observed that splits do generate sentimental value in investors and that this sentimental value boosts the share price in the short term. 

The same thing can be observed with the stock splits of numerous other companies, including Tesla, Amazon, and Apple Inc.

Ford Motors, however, is an exception. Following the split, the general public did not respond favorably to its stock split.

Only twice (1986 and 1977) did the share price increase after the split (prices were adjusted beyond the split ratio).  

On three separate occasions (1983, 1988, and 1994), it decreased (price adjusted beyond split ratio).

Following the 1983 split, it even moved lower the following day by 1.00%. From the aforementioned, we can infer that Ford Motors’ stock split has not been very successful.

Will Ford Motor Company Announce Another Stock Split in 2022?

While the decision to split the company’s stock is entirely up to management, it cannot be foreseen in advance.

A meeting of shareholders is required to get the board of directors’ approval. However, it is highly unlikely that there will be another stock split in the near future, particularly in 2022.

The same has justifications. The company’s share price comes first and foremost. Making stocks more accessible to retail investors and thus more likely to find a place in their portfolios is the main justification and logic behind stock splits. 

For instance, Amazon Inc. announced a 20:1 share split recently when its share price reached $3000 in order to appear “cheaper” to retail investors. 

However, Ford Motors is an exception. Its share price is $16.04 (as of 11.03.2022), so there is no reason to announce the split in order to drive down the price since investors can already afford it.

The inference from prior splits is yet another argument against a share split in the near future. When the share price has reached $50 on every occasion, Ford has announced a stock split. 

Ford Motors once announced it when share prices reached $80 in 1988.

Given that Ford Motors‘ share price increased by just $3.56 over the past five years and provided returns of only 28%, the current share price is nowhere near $50 and is not anticipated to reach that level even in a few years. 

From this, we can infer that it is anticipated to consolidate in the $10–$20 range for some time before something significant occurs in the company.

Ford Motors recently declared that starting with the following fiscal year, its EV division will report earnings separately. EVs are also a big thing for the future. 

After a successful separation from the conventional vehicle industry, it’s possible that Ford’s electric vehicle division will list on the stock market, and we might also see a split in the EV company. 

According to the current situation, it is hardly unlikely that a share split will occur before share prices reach $50.

FAQs About Ford Stock Split

How many times has Ford split its shares?

A total of eight stock splits occurred for Ford stock (ticker: F). In 2000, on August 3rd, there was a most recent stock split. A prior purchase of one F share would equal 30.82592779223 F shares today.

Exactly when will a stock split?

When a company splits its stock, there are no predetermined rules or specifications. Companies that experience a sharp increase in their stock value frequently think about splitting stock for strategic reasons.

Do stocks typically increase following a split?

In addition, the prevailing theory holds that the stock might be more approachable to additional investors at a relatively lower price.

Of course, this does not guarantee that a stock will increase following the announcement or implementation of a stock split. Keep in mind that the value of your holdings is unaffected by a stock split in and of itself.

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