3 Reasons Amazon Stock Could Soar After Its Split

Investors get excited about stock splits. It's certainly understandable; getting more shares of your favorite company can bring a smile to the faces of even the most stoic among us.

It's also true that companies that announce their intentions to split their stock tend to see their share prices run up as the split date approaches. Even though stock splits do not fundamentally alter the value of a business -- they simply create more slices of the same pie -- many people are happy to buy more shares at lower prices.

Professional traders know this, so they also tend to buy stocks that are about to split ahead of their split dates. All this buying can drive share prices up, bringing in more momentum traders and adding fuel to the fire.

Source Fool.com