Amazon's Stock Didn't Take Off Post-Split. Here's Why.
You might have cheered when Amazon (NASDAQ: AMZN) announced its 20-for-1 stock split -- whether you're already an Amazon investor or just thinking of buying the stock. That's because a stock split opens the stock up to a broader range of investors. In a split, the market value stays the same. But the company issues more shares to current holders. As a result, the price of each share decreases.
Amazon stock rose on its first day trading at the split-adjusted price. It advanced 2%. But the next day, the stock slipped 1.43%.
It's reasonable to imagine investors flocking to Amazon shares at the new, lower price. So why isn't that happening in a big way? Let's find out.
Source Fool.com
