MasterCard (NYSE: MA) is doing a 10-for-1 split of its stock, which will effectively lower its stock price from $800 per share to $80 per share, making it cheaper for investors. But is a lower stock price really cheaper for investors or an illusion of value?
Warren Buffett has kept "A" shares of Berkshire Hathaway (NYSE:BRK-A) so expensive that they're out of reach for most retail investors at around $175,000 each. But he recently split Berkshire Hathaway's (NYSE: BRK-B) "B" shares to make them a more affordable $116 per share.
In the video below, Erin Miller sits down with Fool contributor Travis Hoium so see why companies split shares and what a stock price really means.
Erin Miller owns shares of Berkshire Hathaway. Fool contributor Travis Hoium manages an account that owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway and MasterCard. The Motley Fool owns shares of Berkshire Hathaway and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.