Do stock splits matter if you can just buy fractional shares?

Question

I understand that stock splits are meant to make stocks more affordable for more investors but if platforms allow fractional shares like Robinhood, does this matter as much? If theoretically more platforms supported fractional shares, would stock splits matter less and less?

In: Economics

Answer 1

When you buy a fractional share, your trading company has to buy a whole share and give you only part of the profit/loss. They have to take the rest of the profit/loss themselves. They might not want to do that for very long.