The Most Important Lesson Alphabet and Tesla Investors Can Learn From Amazon's Stock Split

Could 2022 go down in the books as the year of the stock split? Maybe so. Several companies have already conducted splits this year, notably Amazon (NASDAQ: AMZN). Others are on the way, with investors especially anticipating upcoming stock splits for Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Tesla (NASDAQ: TSLA).

You'll no doubt be able to find very different opinions about the merits of buying these stocks before or after their respective splits. But you can often gain insight into what the future might hold by looking at the past. Here's the most important lesson Alphabet and Tesla investors can learn from Amazon's recent stock split.

There's a simple explanation for why companies choose to conduct stock splits. When share prices get too high, many small investors can't afford to buy the stocks. Although splitting doesn't change anything about a company's underlying business, the move can attract more small investors who want to buy the stock.

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Source Fool.com