NEW YORK (AP) — Payment processor Visa has announced a four-to-one stock split, effective March 18.
Visa said Thursday that its shareholders will receive three additional shares for each share they own as of February 18. Based on the close of Visa's stock Thursday at $248, the new shares will be worth $62 each.
Visa did not give a reason for the stock split. However, Visa's stock is the most expensive of the 30 companies that make up the Dow Jones industrial average, and among the most expensive in the Standard & Poor's 500 index.
The stock split will have a direct impact on the Dow's trading behavior because of a quirk in how the Dow index is calculated. The Dow is a price-weighted stock index, which means more expensive stocks can move the Dow more than less expensive ones.
The Dow's calculation makes Visa, at $248 a share and a $164 billion market capitalization, a more influential stock than General Electric, which is $24.08 a share but has a $241 billion market worth.
By contrast, the S&P 500 uses market capitalization to calculate its value, which is why Wall Street uses the index as a more accurate gauge of the U.S. stock market.
After the stock split, Goldman Sachs will be the most expensive member of the Dow, at a value of $175.99 per share as of Thursday.
Visa made the announcement when it reported an 11 percent rise in fiscal first-quarter profits, helped by increased consumer spending on Visa's massive payment network.