Tech Sell-Off: 1 Stock-Split Stock You'll Wish You'd Bought On the Dip

When an asset or index declines in value by 20% or more for a prolonged period, it's generally considered to be in bear market territory. The tech-heavy Nasdaq-100 has surpassed that mark, down 26% from its all-time high. Watching such a slide can be incredibly nerve-wracking for investors, but the broader U.S. stock market has always recovered from such events over the long term.

To address such price drops, some companies (even some of the largest in the world) have sought to create additional shareholder value during downturns through non-operating maneuvers like share buybacks and stock splits. A stock split, for example, won't improve the underlying business on its own. But some think it makes the stock more attractive to small-scale investors and boosts interest in the stock.

Amazon (NASDAQ: AMZN) has scheduled a 20-for-1 split to take place on June 6, and based on where it closed trading Tuesday, that would cut the share price from around $2,177 to close to $109. Conventional wisdom suggests that money will be aimed at Amazon stock from new buyers, pushing its price higher. Is this a good reason to buy Amazon stock on the dip?

Source Fool.com