Netflix (Nasdaq: NFLX) closed at an all-time high on Feb. 14. It's been a Valentine's Day massacre ever since.

Shares of the high-tech movie rental company have surrendered 22% of their value since last month's peak, and it's not as if the carnage is deserved. The stock has closed lower every day this week, presumably triggered by a movie studio's decision to sell a three-year-old movie as a two-day rental through a Facebook app.

Really? Was the market that hard-up to find a reason to sell off Netflix?

If you want a new scapegoat, how about this one: Netflix shares fell because the stock was just too darn high.

Cheap is more than just a number
Notice that I didn't say that Netflix was too expensive -- though that argument certainly has some degree of merit. I simply said that the stock price itself was just too lofty to attract individual investors willing to fork over nearly $25,000 for a round lot of 100 shares.

Maybe things would have played out differently if Netflix had declared a few stock splits along the way of its meteoric rise.

I'm not stupid. I have always argued that stock splits are zero-sum games. However, there's been a general resistance by some of the country's tech leaders to buck the trend. They're on a race to Warren-Buffettlandia, even if they seemed perfectly complacent to split their shares in the past when they were approaching the high double digits.

  • Netflix split seven years ago, when its stock was in the $70s.
  • Apple (Nasdaq: AAPL) has historically split as it approaches triple digits, with its last split taking place six years ago.
  • (Nasdaq: PCLN) once played the split card to make its stock price more attractive. However, the popular online travel portal actually went this route when its stock price was too low, opting for a 1-for-6 reverse split in 2003 after the dot-com bubble popped.

All three of these stocks are trading well in the triple digits, with Netflix, Apple, and priceline closing yesterday at $192.99, $352.47, and $468.52, respectively.

The stratospheric price tags haven't really gotten in the way. All three stocks have notched new all-time highs in recent weeks. However, when an investor needs to have $46,852 to buy 100 shares of priceline, it does make one reflect on the luxury of its "name your price" mantra.

Let's blame Big G
I blame Google (Nasdaq: GOOG) for this trend where tech darlings feel that they must command share prices as wide as Cadillac Escalades.

The leading search engine wanted to go public as high as $135 seven years ago, but had to settle for $85. It hasn't looked back. It closed at $591.77 yesterday, though it should be noted that its all time high was set nearly four years ago.

Maybe Netflix, Apple, and priceline are waiting for Google to split before following suit. Maybe this is a boardroom race that us lay investors are not privy to. Either way, it has to be a grind for a small investor to balk at paying nearly $60,000 for 100 shares of Google.

We live in a wonderful time of rock-bottom brokerage commissions. Efficient trading makes odd lot purchases a breeze. There's no shame in buying 10 shares of Google, especially if buying much more would create an imbalanced portfolio. However, what if investors are holding back? What if stocks with triple-digit prices are doing their shareholders a disservice by wearing their capital appreciation like scout badges for all to see? What if this isn't really a zero-sum game after all?

Splitters live to tell the tale
Google and Apple aren't all that expensive by traditional valuation metrics. Google trades at just 15 times next year's projected profitability. Apple fetches a mere 13 times fiscal 2012's bottom-line estimates. Priceline and Baidu (Nasdaq: BIDU) trade at loftier 2012 P/E ratios of 20 and 33, respectively, but they're growing at even faster clips.

Stock splits aren't fatal. Baidu and Green Mountain Coffee Roasters (Nasdaq: GMCR) have climbed nicely since executing stock splits last year. China's largest search engine went for a 10-for-1 split. The java junkie behind the Keurig single-cup systems executed a 3-for-1 exchange.

Have the splits given the shares a psychological boost, or would Baidu have closed yesterday at $1,193.60 -- and Green Mountain at $130.92 -- without the cosmetic process?

I miss the days when a company would rally after declaring a stock split. The split itself didn't alter the math, but the implications were typically perceived as bullish. Companies splitting to bring their share prices back down to more accessible levels were optimistic in building those sand castles back up.

What are you waiting for, Google? Split already!

What do you think about stock splits? Share your thoughts in the comment box below.