The Ultra Popular Stock That Should Take a Stock Split

  The Ultra Popular Stock That Should Take a Stock Split A Share Split allows a company to change its share price by increasing or decreasing the number of outstanding shares by decision of the board of directors. For example, a company with a $100 share price and 50 million outstanding shares, if it experiences a 2-for-1 share split going forward, will result in a $50 share price and 100 million outstanding shares. That way, the share price is halved while the market cap remains exactly the same. Although there is no difference in the overall valuation of the companies, it is known that there are a number of positive psychological factors brought about by the stock splits. It reduces the cost of purchasing shares for investors. Companies that do stock splits usually have a nominally high share price. In other words, companies that split their shares almost always outperform Wall Street and investors' expectations.

Amazon

E-commerce giant Amazon.com (NASDAQ:AMZN) has split its shares three times since becoming a public company. But unfortunately it has not yet enacted a split since September 1999. Currently, you need to save about $3,200 just to buy a single share.

A Share Split allows a company to change its share price by increasing or decreasing the number of outstanding shares by decision of the board of directors.

The forward stock split will open the door for more retail investors to become shareholders of their dominant online company, Amazon.

How Dominant Is Amazon?

A report by eMarketer in April 2021 put Amazon's US online market share at 40,4 %. This means that for every $1 purchased online in the US, $0.40 is diverted from the Amazon marketplace. Its retail dominance has also helped the company sign up for Amazon Prime memberships with more than 200 million people worldwide.

The Power of Amazon AWS!

It should not be forgotten that Amazon is also a cloud infrastructure service king. Amazon Web Services (AWS) has annual sales of $54 billion as of the first quarter of 2021. AWS plays a very important role in expanding Amazon's cash flow. With the stock split, it appears that more retail investors will support Amazon's long-term climb.  

Source: https://www.nasdaq.com/

 

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