Splitting Pennies & Peculiar Profits

Now, listen closely, because Wall Street is a peculiar place. For the last few years, everyone’s been terribly excited about Artificial Intelligence – a sort of brainy contraption that promises to do everything except polish your shoes. But there’s another little trick these grown-up investors adore: stock splits. It’s like taking a rather large chocolate bar and breaking it into smaller pieces. You still have the same amount of chocolate, mind you, but it looks like more. A silly game, really, but they seem to enjoy it.

A stock split, you see, is simply a cosmetic adjustment. It doesn’t change the actual value of the company, not one little bit. It’s like painting a donkey purple – it’s still a donkey, but it’s a rather more noticeable donkey. They come in two flavours: forward and reverse. Investors, being rather predictable creatures, prefer the forward ones. These make the shares cheaper, allowing more little people to buy a sliver of the pie. A perfectly sensible notion, if you ask me.

Companies that split their shares forward tend to be doing rather well, outsmarting their rivals and inventing all sorts of clever gadgets. A study by some very serious people at Bank of America discovered that these splitting companies tend to perform remarkably well in the year that follows. Back-tested to 1980, they said. A long time ago, that.

And now, after a few splittings in 2025, the first blockbuster split of 2026 has arrived. Booking Holdings, a giant company that sells holidays and hotels, has decided to split its shares 25 ways. A rather grand gesture, if I may say so. And it’s opened the door for another company – a truly magnificent one – to follow suit. A company that’s seen its shares climb a whopping 1,620% since it first appeared on the scene.

Booking Holdings Takes Flight

Just as the clock struck closing time on February 18th, the people at Booking Holdings announced their results and, with a flourish, a 25-for-1 split. When this takes effect on April 2nd, a share that cost a rather frightening $4,076.79 will suddenly be a much more manageable $163.

It’s quite clear that the little investors inspired this. Without the ability to buy fractions of a share, they’d have to save up a small fortune to purchase just one. Lowering the price makes it easier for them to join the fun, which is all very well, I suppose.

Over the last 25 years, shares in Booking Holdings have soared nearly 25,000%, with dividends included. That’s a compound annual growth rate of about 24%. Such gains don’t happen by accident. They are the result of a company being remarkably good at what it does.

Booking Holdings dominates the online travel business in Europe and has been enjoying tremendous growth in Asia. While the US market is rather crowded, Booking has thrived internationally. They’ve also concocted a clever “Connected Trip” strategy, keeping customers within their own little ecosystem, bundling flights, hotels, and experiences. A bit like a spider and its web, really.

And let’s not forget their capital-return program. The dividend yield is a bit paltry, but their share buybacks have been quite impressive. Since 2014, they’ve reduced the number of shares outstanding by almost 39%. A clever trick to boost earnings per share, wouldn’t you agree?

A Magnificent Split on the Horizon

Dozens of companies could split their shares, simply based on their high price. But a split isn’t just about price. It’s about who owns the shares.

A company needs a good number of its shares held by ordinary investors to even consider a split. As of February 20th, over 30% of Meta Platforms’ shares were held by non-institutional investors. And with a share price of $656, it’s the perfect candidate to follow in Booking’s footsteps.

What would make this split truly historic is that Meta is the only member of the “Magnificent Seven” that hasn’t split its shares before. It went public more recently than the others, but a 1,620% return in almost 14 years deserves attention from the board.

Meta’s competitive advantages suggest its shares will continue to climb, making a split all the more sensible.

The foundation of Meta remains its social media platforms – Facebook, WhatsApp, Instagram, Threads, and Messenger. In December, these platforms attracted an average of 3.58 billion daily users – far more than any other social media site. That gives them tremendous pricing power during good times.

And Mark Zuckerberg is investing heavily in Artificial Intelligence. While these investments may not pay off for years, incorporating AI into Meta’s advertising platforms allows businesses to create messages tailored to individual users. It vastly improves click-through rates and boosts Meta’s pricing power.

And finally, Meta has a cash-rich balance sheet. They ended 2025 with about $81.6 billion in cash and generated $115.8 billion in net cash from operations last year. They can afford to invest in new ideas without disrupting their existing business.

Truly, no company is better positioned to become the next stock-split sensation than Meta Platforms. A rather splendid prospect, don’t you think?

2026-02-24 13:13

Booking Holdings Takes Flight

A Magnificent Split on the Horizon

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