Down 23%, Should Investors Buy Alphabet Before Its Stock Split?
Shares of the leading search engine operator, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), have hit a roadblock, falling 23% since the start of the year. The company will undergo a 20-for-1 stock split on Friday, July 15, with the aim of making its shares more affordable and alluring to retail investors. Of course, it's important to note that stock splits have absolutely no effect on the market value of a company.
When companies initiate stock splits, the number of outstanding shares increases and the price per share decreases. This occurs proportionately so that the market capitalization of the company remains unaltered. On that note, investors shouldn't get distracted by Alphabet's upcoming stock split; instead, they should focus on the company's fundamentals to determine whether to buy the stock. So is Alphabet a worthy investment right now?
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Source Fool.com
