So there's been this interesting trend on Wall Street lately where stock splits are basically printing money for investors. Like, seriously - companies that announce forward splits have historically averaged 25% returns in the year after, compared to just 12% for the broader market. That's a huge difference.

Naturally, everyone's wondering who's next. And two obvious candidates keep coming up: Costco and Netflix. Both are trading at ridiculous nominal prices - Costco's basically kissing $1,000 per share while Netflix is hovering around $1,300. On paper, they seem like perfect candidates for a stock split announcement.

But here's where it gets interesting. I dug into this and discovered why neither company is actually likely to make a move in 2025 or anytime soon.

Take Costco first. Their CFO basically said during a recent earnings call that the economic arguments for a stock split just aren't as compelling anymore. Why? Because retail investors can now buy fractional shares through most brokers. That was the whole original point of stock splits - making shares nominally affordable for everyday people. But that problem's already solved.

Costco's management gets it. They're saying they'll keep evaluating, but there's no urgency. When Costco last split its stock back in 2000, fractional trading wasn't really a thing. Fast forward to now, and the landscape has completely changed. So even though the share price is high, the actual incentive to split has basically disappeared.

Netflix is a different story entirely. The problem there isn't about affordability - it's about who actually owns the stock. Institutional investors hold about 80% of Netflix shares. Hedge funds, passive funds, big money managers... they don't care about nominal price. They're buying millions of dollars worth regardless. Retail investors only own roughly 20% of the company.

Here's the thing: forward splits happen because retail investors push for them. They're the ones who feel priced out. But if retail investors are a minority shareholder base, there's just no pressure on the board to make it happen. Netflix's retail ownership is decent compared to some companies, but it's still not enough to force the issue.

So while both companies have the high share prices that typically trigger split speculation, the actual mechanics underneath tell a completely different story. The cost of a stock split from a nominal share price perspective isn't really the barrier it used to be. And for Netflix specifically, the shareholder composition just doesn't create the demand.

It's a good reminder that not everything obvious on the surface actually plays out the way you'd expect. Sometimes you have to look at what's actually driving corporate decisions rather than just assuming the pattern will repeat.