Why do stock exchanges NOT have a maximum share price?

Question

I was reading this question over here Why do stock exchanges have minimum share price requirements?

And that got me thinking about why there isn't a maximum share price on stock exchanges?

Or are there some exchanges where there is a max share price?

I mean I get the whole "to the moon" idea. And certainly why a company might want to have a very high share price. But since shares can be split indefinitely I'm just wondering wouldn't it behoove the exchange and brokers to have more tradeable securities. After all they make their money on activity.

Things like BRK.A at $420,000 a share or even AMZN at $3600 are less liquid than say something like AAPL at $148.

Is there a rationale why an exchange wouldn't impose a cap above which you must split?

Answer 1

Decades ago most transactions involved buying shares in lots of 100 shares. A high price could block some investors.

Then things progressed. Many people own shares through their mutual fund or ETF. This can be through a taxable account or a retirement account. A large fund doesn't have any issues with high share prices.

Now many brokers are allowing investors to buy a fraction of a share. The price of an individual share doesn't make a difference.

Answer 2

A high share price discourages trading. A classic example of this is Warren Buffett who has never allowed a stock split of Berkshire Hathaway class A shares because he wants to attract long-term investors for that stock. He has allowed the B shares to split because he wants an affordable class of Berkshire shares available for smaller investors.

In reality, your question isn't really very relevant for two reasons. First, most major discount brokers in the U.S. now charge no commissions so a lower share price offers them no additional benefit ("more tradeable securities"). Secondly, many brokers now offer the ability to buy fractional shares so a stock with a high share price is no longer a prohibitive barrier.