As NASDAQ and NYSE stocks must be priced at least $1 per share, it feels intuitive and doubtless that large- and mid-caps fancy their share prices to outstrip and remain well over \$1. But what minimum (range of) share price do they desire? To wit, at what share prices would they think about reverse stock splitting to boost their share price?
Why Some Companies Don't Split Their Stock explains why companies eschew low share prices.
Why Not Split?
There is not a whole lot of evidence to suggest that stock splits matter. Finance professors have examined stock splits and see no actual impact on a company’s value or performance.
Many companies prefer to avoid splitting because they believe a high stock price gives the company a level of prestige. A company trading at $1,000 per share, for example, will be perceived as more valuable even though the firm's market capitalization may be the same as a company whose shares trade at \$50.
Smaller companies may also wish to avoid stock splits because of a danger of share values falling too low. There have been cases where companies have split shares only to see the stock market dive, pushing shares below \$10. Psychologically, this may turn off some shareholders, and in extreme cases, share prices may be too low for a company to be listed on an exchange. Companies will avoid splitting to protect themselves from this possibility.