Trade Desk implemented 10-for-1 stock split, explained

The Trade Desk, a data-driven advertising company, experienced unusual trading activity this week. The company completed its very first stock split and began trading under the split on June 17. What was the impact of the stock split on The Trade Desk stock?

The Trade Desk is designed to deliver data driven advertising to help users run more successful advertising campaigns and expand their audience. The company caters to advertising agencies, with an open platform that agencies can customize to suit their needs. It is a listed company on the Nasdaq scholarship since 2016 and trades under the ticker symbol “TTD”.

Trade Desk Stock Split

The Trade Desk was founded in 2009 based on the opinion of the founders that advertising was not effective at the time. Its headquarters are in California, while it has offices in the United States, Europe and Asia.

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Source: Trade Desk Facebook

They sought to create “an independent media buying platform focused only on the buy side”. The Trade Desk has just undergone a share split. What exactly is a stock split and what impact can it have on stock prices?

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In a stock split, the total number of outstanding shares for a company increases. A common stock split is a 2 for 1 split, in which each share becomes two shares. A company with 1 million shares would have 2 million shares outstanding as a result of a 2-for-1 split.

The Trade Desk implemented a 10-for-1 stock split, which means that each pre-split stock now equals 10 shares of TTD. A stock split does not change the intrinsic value of the company itself, but it does impact the share price.

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Often, companies divide their stocks in order to lower the price per share and make them more attractive to more investors. Some companies refuse to split stocks no matter how high the stock price is, which is why Berkshire Hathaway stock is so high.

Sometimes companies implement a reverse stock split, in which a company divides the number of shares held by shareholders, instead of multiplying them.

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the stock split of the trading desk

Source: Trade Desk Facebook

Impacts of the TTD 10 to 1 division

As The motley madman noted, TTD experienced a period of massive growth leading to its stock split. In the past four years, turnover has quadrupled, with net income multiplied by twelve.

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TTD’s revenue grew 26% year-on-year in 2020, despite the fact that many advertising companies have chosen to cut their advertising budgets or even suspend their campaigns due to uncertainties related to COVID-19.

Despite the increase in the share price following the stock split, stock prices, after adjusting for the split, are below TTD’s all-time high. All-time split-adjusted high would be $ 97.28 per share, according to The motley madman.

In a May press release announcing The Trade Desk’s stock split, CEO Jeff Green said the company’s stock prices had increased by 2 100% since its IPO in 2016. He said: “We are confident in our prospects for future growth and our goal with this split is to make The Trade Desk shares more accessible to our employees and to a broader base of investors. “

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