Google stock split

[Anonymous]

I’ve been thinking about buying Google/Alphabet stock. In particular, I’m considering buying it before the 20:1 split. I know that the split doesn’t change anything fundamentally, but it may give the stock some momentum. Shareholders as of the close of July 1 get the extra shares. Any thoughts?

[Anonymous]

My thoughts are that any potential momentum from the split was priced in the day the split was announced. So you're not going to get any extra boost buying it two weeks beforehand.

That said, if you like the stock you should buy it.

[Anonymous]

Thanks for the heads up. This was on my radar but more recently fell off. Generally, stock splits signal management confidence in the firm’s future prospects. I’m a buyer.

[Anonymous]

Seems like an opportunity/event to play with options.

[Anonymous]

Google looks to be rising nicely into the split deadline of July 1.

[Anonymous]

what extra shares?

[Anonymous]

Anonymous wrote:what extra shares?

If you own one share of Google at the close of trading on July 1, you will get an additional 19 shares. The new stock price will trade as of July 15. However, the stock price will also be divided similarly, so there is no inherent benefit. Essentially, you have the same “pie,” but it will be sliced into more pieces. Typically, there is significant buyer interest going into a split date because many people like the idea of owning more shares and it broadens ownership - more retail investors can buy a share of a $100 stock than a $2000 one. Also, if you use options, trades require transactions in 100 share increments. That can be pricey for a $2000/share stock. Finally, there’s the management signaling effect, as management typically splits the stock when they see good things ahead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:what extra shares?

If you own one share of Google at the close of trading on July 1, you will get an additional 19 shares. The new stock price will trade as of July 15. However, the stock price will also be divided similarly, so there is no inherent benefit. Essentially, you have the same “pie,” but it will be sliced into more pieces. Typically, there is significant buyer interest going into a split date because many people like the idea of owning more shares and it broadens ownership - more retail investors can buy a share of a $100 stock than a $2000 one. Also, if you use options, trades require transactions in 100 share increments. That can be pricey for a $2000/share stock. Finally, there’s the management signaling effect, as management typically splits the stock when they see good things ahead.

Def makes the stock more accessible for dollar cost avg. It's a great company so I'll be legging in once the stock split noise is gone. Long term buy and hold.

[Anonymous]

Up $115 today, $239 for the week. Can’t wait for next week. Will probably rally into the July 1 split.

[Anonymous]

3k pre-split for sure.

[Anonymous]

Do stock splits matter in the days of fractional ownership? I purchased about a third of a share (and lost about 25% of the value). I wasn’t stopped by the high price of a single share.

[Anonymous]

Anonymous wrote:Do stock splits matter in the days of fractional ownership? I purchased about a third of a share (and lost about 25% of the value). I wasn’t stopped by the high price of a single share.

Most people don’t want fractional shares. Not all brokerages offer them. Also, they are more expensive to buy and sell and less liquid (basically, the transaction costs are higher than traditional shares). Most importantly, the split effect is still alive and kicking for the most desirable companies. Recent split examples include Apple, Tesla, Nvidia, Amazon, and now Google. Sure, the prices of these share have varied with the market, but go see how their stocks performed around their split dates. Basically, they all increased 20-40%+.

[Anonymous]

Anonymous wrote:Do stock splits matter in the days of fractional ownership? I purchased about a third of a share (and lost about 25% of the value). I wasn’t stopped by the high price of a single share.

If you want to write covered calls, you need at least 100 shares because an option contracts is for 100 shares. A lot of people write covered calls for income while they wait for the stock to appreciate. The split will make it much more affordable to own 100 shares. This strategy doesn’t work with fractional shares.