What do the most significant stock splits mean for investors in 2022?
Google’s parent company, Alphabet, announced the stock split on July 15, 2022. The price of a single stock became more affordable than usual. But what should the investors be worried about?
A stock split doesn’t change the projection of that company’s performance, and there’s no telling if share prices will rise or fall after a significant stock split. The senior portfolio manager at global investments in Atlanta said A stock split “doesn’t in and of itself make the company more valuable,” He also stated, “If it’s a stock an investor feels like is an attractive value, it should be an attractive value before and after the split.”
Historically it is evident that every stock split in the industry is all about slashing the highest costed stock of a company, making it more attainable for the investors who couldn’t afford the pre-split prices of the share.
Some Top Stock Splits of 2022
Google’s 20-to-1 stock split means any shareholder holding one share of google pre-split will have 20 shares today. This was one of the most significant splits in the industry as per the S&P index, as stated by Jones Indices.
So far, the three most high-profile stock splits this year have all been in significant activity in the technology sector.
Below are the stock splits that retail investors have anticipated, also sometimes referred to as professionals :
One of the largest e-commerce platforms announced its stock split in 1999. They had announced a 20-to-1 Stock split which pushed their stock price to 5% higher than usual. The new price trading began on June 6, 2022. Amazon’s stock price at the time of writing was trading at $119, almost 30% down from the date of the stock split.
Shopify announced a split of 10-to-1 on June 28, 2022, which is almost 76% down in 2022. As a result, the company has just laid off its employees and slashed the internship.
Alphabet has registered a bullish trend after a 1-to-20 share split. A senior equity manager of Alphabet quoted it as the best buy time amid the company split.
The original gangster of meme coins, Gamestop, opted for a 4-for-1 stock split in July 2022. This split has lowered the stack value to less than half of its all-time high.
Tesla broadcasted in a regulatory filing that it plans to strive for shareholder approval for a 3-for-1 stock split when it holds its annual meeting in August 2022. It has piqued the interest of both Wall Street and retail investors, but Tesla offered no details at the time.
Although not a tech stock, Tesla CEO Elon Musk has engaged in a sometimes-contentious, on-again, off-again bid to buy Twitter and take the social media company private.
Tesla now trades approximately 36.50% down since its split.
Should you buy into a stock split?
Sometimes, buyers’ explicit momentum can make the price surge higher than expected. Conversely, retail investors would also consider the split rule of the stock and then decide to buy. Some analysts also stated that stock splits always result in a price surge. But from per investment point of view, buying during a stock split should not be a suggested move.