LAM Research Stock Split: What Investors Need to Know

LAM Research Stock Split Announced

On January 10, 2023, semiconductor equipment maker LAM Research Corporation (NASDAQ: LRCX) announced a 2-for-1 stock split. The stock split took effect on March 9, 2023, with shareholders receiving one additional share for every two shares they owned.

What Is a Stock Split?

A stock split is a corporate action in which a company divides its existing shares into a greater number of shares. Stock splits are typically done to increase liquidity and make the stock more accessible to a wider range of investors.

Key Details of LAM Research's Stock Split

• Split Ratio: 2-for-1
• Effective Date: March 9, 2023
• Record Date: February 17, 2023
• Ex-Dividend Date: February 16, 2023

Impact of the Stock Split

• Increased Shares Outstanding: The stock split increased LAM Research's total number of shares outstanding from approximately 185 million to 370 million.
• Lower Share Price: The stock split reduced the share price by half, making the stock more affordable for individual investors.
• Increased Liquidity: The stock split improved the liquidity of LAM Research's stock, making it easier for investors to buy and sell shares.

Benefits of a Stock Split

• Increased Investor Accessibility: The reduced share price allows a broader range of investors to participate in the ownership of LAM Research.
• Enhanced Liquidity: The stock split increases the number of shares available for trading, which can improve liquidity and reduce volatility.
• Potential for Appreciation: Historically, stock splits have often been followed by an increase in stock price, although this is not guaranteed.

Historical Performance of Stock Splits

According to a study by the Journal of Financial Economics, companies that have split their shares have outperformed the market by an average of 10% over a 10-year period. This suggests that stock splits can be a positive sign for investors.

Potential Motivations for the Stock Split

• Increased Accessibility: LAM Research may have split its stock to increase the accessibility of its shares to a wider range of investors.
• Reduced Volatility: The stock split may have been intended to reduce the volatility of LAM Research's stock.
• Positive Psychological Impact: Stock splits can create a positive psychological impact on investors, making them more likely to hold onto shares and invest in the company.

Conclusion

LAM Research's stock split was a significant event for the company and its shareholders. The split increased the availability and affordability of the stock, potentially benefiting investors. While historical performance suggests that stock splits can be positive, it is important to note that past performance is not indicative of future results. Investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.

Table 1: Key Financial Data for LAM Research

Table 2: Stock Performance of LAM Research

Table 3: Stock Split History of LAM Research

Table 4: FTSE Global Semiconductor Equipment Index Performance