Tag Archives: split

2022 Stock Splits Were BAD For AMZN & GOOG — They Attracted A Different Type Of Investor.

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by Anura Guruge
on February 8, 2023

Click to ENLARGE. Charts, of course, from ‘MarketWatch.com‘.

My contention, & it is just that, is that AMZN & GOOG would have fared BETTER in this down market IF NOT for the 20-to-1 splits!

Yes, of course, in early 2022 (i.e., last year) we all expected that AMZN & GOOG will go gangbusters after their 20-to-1 splits. LOT of folks bought these shares ahead of the splits on this assumption — which had been the case in prior, high-profile splits.

With interest rates shooting up (to curb inflation) this has been a difficult & down market. That is a given.

But, I am THINKING that AMZN & GOOG would have been more resilient IF NOT for the split. Why? The 20-to-1 split change the demographics of the ownership.

Prior to the split you basically had to be rich to own a chunk of AMZN or GOOG. When AMZN was $3,000 you needed $300,000 in order to own 100 shares. Not so after the split. You could own 100 for a mere $15,000.

AMZN & GOOG were no longer exclusive.

Let me be blunt. After the split, riff-raff were able to afford these shares. They trade differently than the more refined investor.

That is my thesis. We DEVALUED the ownership.

Just like a neighbourhood. If the prices drop by a factor of 20 the ownership profile will shift dramatically. That is my point.

I am not sure whether this can ever be tested or proved.

But, something to THINK about.

Google (GOOG) Options, Post-Split, Are NOW Repriced (After Market Close) & Will Start Trading Tuesday, July 19, 2022.

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by Anura Guruge
on July 18, 2022

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Click to ENLARGE. From ‘Fidelity‘.
Click to ENLARGE. This was the ‘0.00’ pricing until markets closed on Monday, 7/18/2022.

I was not surprised since this was also what happened post AMZN split in June — option trading had to wait until Tuesday. So, ditto GOOG. I had told you that this will most likely be the case. Anywho, the options are now repriced, if not activates. You can see they grayed out. They look good. I can’t wait.

I already trade AMZN, TSLA, NVDA, ROKU, AAPL, NIO, JD, PLUG etc. etc. options. Now I can add GOOG to this august list. SMILE. My addiction. Option trading makes me happy.

So, here is to tomorrow. Let GOOG, post-split, option trading begin. Enjoy.

The NEW Post-Split Google (GOOG) Shares Are Already In My Account, Priced At $112.767; Options NOT Repriced As Yet.

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by Anura Guruge
on July 16, 2022

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Click to ENLARGE. From one of my accounts at ‘Fidelity‘.
Click to ENLARGE. From ‘Fidelity’.
Click to ENLARGE. Underlying chart (as ever) from ‘marketwatch.com‘.

No surprises. Exactly as I had expected — & to be fair we already had a preview of the process with the Amazon (AMZN) split in June. So I knew what to expect — & it was also interesting that unlike with the AMZN split Fidelity didn’t bother to send me an e-mail with a schedule of what will happen re. the stock & options, following the SPLIT-DAY market close.

I nailed the new, post-split price BUT that is nothing to gloat about. It was going to be 1/20th of yesterday’s (i.e., July 15th) market close price. So, $112.77 (rounded up to 2-decimal points).

Here is something WILD. I included the AMZN share price (above) so you can see the two prices side-by-side. They are ONLY 78 cents apart. AMZN costs 78 cents more than GOOG. Wow.

On November 14, 2021, (using post split prices in BOTH cases) AMZN was $184, GOOG was $150. A $34 dollar gap. This is now down to $0.78! AMZN has gone down a LOT, much more than has GOOG.

Google (GOOG) Stock Split Is DONE. Stock Will Open Monday $112.77. Stock Down $502 Since Split Announced!

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by Anura Guruge
on July 15, 2022

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Click to ENLARGE. Underlying chart (as ever) from ‘marketwatch.com‘.

GOOG 2022 Stock Split Calendar — Split Date Was Today, July 15.

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So, it has finally happened, 5 months & 2 weeks (164 days) after the announcement, GOOG has at last split — 20-to-1. The split is taking place, across computers around the world, even as I type. Tomorrow morning the new split shares will be in accounts (IF you are lucky enough to have owned GOOG). [Yes, I have owned GOOG, though alas not that many, for many, many years.]

That GOOG went down $502 (18.2%) between the February 1, 2022 and today’s split is hard to believe. Many thought that GOOG will go up as the split approach — as had been the case with previous splits of popular shares. But, alas, this is 2022 with its horrendous (once in 40-year) inflation & the consequent interest rate hikes.

Amazon (AMZN), the other, BIG stop slit of 2022 (to-date), also saw its share price plummeting ahead of the split. It hasn’t done that well after the split either. Even today, nearly 6 weeks AFTER the split, AMZN is BELOW, well BELOW, the split price! This has some GOOG shareholders worried — as they should. To be honest, I am NOT that concerned. At my advanced age, with over 40 years stock investing in the rearview mirror, I understand that the market goes up & down & that it will eventually start rising after a fall & vice versa. Plus, my big thing is OPTION TRADING — actually that is an addiction. Now with this 20-to-1 stock split I will finally be able to do option trades on GOOG. WOW. Yes, I never had 100 shares of GOOG. But, I will after tomorrow. Actually I will have more than 200 … {SMILE} As some of you know, my BIG share holding is in AMZN & I have no regrets. {SMILE}

So, here is to the GOOG 2022 20-to-1 SPLIT. Cheers. Keep your fingers crossed. It will start going up someday — & then it will go up, quite a bit, for some time. That is a given.

I Gave You A Heads-Up That Amazon (AMZN) Share Price Could Drop Below $115 2-Days Ago. Did You Take Heed? Next Stop $99.

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by Anura Guruge
on June 10, 2022

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Click to ENLARGE and read here. Link to original post.

I can’t really gloat (let alone take much credit) since this was SO, SO ELEMENTARY.

IF CPI ran hot, even slightly, the market was going to go down. That is obvious. Inflation is still running high. You can see it all around us. So, I had a fairly good hunch that CPI will come in slightly higher than estimates. It did. The market tanked. QED.

It is good that AMZN has gone down, this much, since Monday’s split. The newbies to AMZN that piled in after the split have to learn their lessons. AMZN stock is volatile & it does not defy gravity.

I suspect that quite a few got caught in a margin squeeze. They borrowed against margin to buy AMZN and with stocks going down they are being asked to repay some of the margin they borrowed. So, they have to sell stock, in a hurry, including their new purchased AMZN shares to raise the cash. That sends AMZN prices even lower.

I will now NOT be surprised if we see AMZN trading BELOW $100 in the next month. SMILE. [Don’t worry about me. Thanks. I am OK. I am an options trader. SMILE.]

It Is GOOD That Amazon (AMZN) Share Price Is BELOW That Of The 20-to-1 SPLIT Price On Monday!

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by Anura Guruge
on June 8, 2022

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Click to ENLARGE. Base chart (as ever) is from ‘MarketWatch.com‘ (with thanks).
Click to ENLARGE.

It is NOT down much, just in the 1% range, BUT this is GOOD.

Why?

1/ It is a salutary lesson to all the NEWBIES piling into the stock, now that they can finally afford it, that AMZN is volatile. It goes up, down & sideways. You get into AMZN for the long-haul. So, this is not much of a drop, but it will make the newbies appreciate that they are not going to see AMZN going up each day.

There is a good chance that AMZN might go down even further, into the $115 range, if Friday’s CPI (Consumer Product Index) number shows that inflation is NOT abating. The market could go down taking AMZN with it. So, it is good to realize that the SPLIT price of $122.35 was NOT, & is NOT, a firm bottom.

Prior to the end of the year we can see AMZN both BELOW $116 & ABOVE $150.

This time next year I expect it to be sniffing at $200. (SMILE).

2/ This small drop gives some a chance to get in WITHOUT thinking they missed the boat. That is good. But, now they will get in understanding that AMZN will go down as well as up.

Chance for folks like us, long-term holders, to NIBBLE. SMILE.

3/ It is GREAT for option traders (like I). SMILE. When you trade options (cannily) it doesn’t matter if the underlying stock goes up or down! You just want it to move in one direction or the other. SMILE.

Amazon (AMZN) SPLIT: I Now Have The New Shares In My Account, Priced At $122.35. (Options Pending.)

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by Anura Guruge
on June 4, 2022

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Click to ENLARGE.

Well, it is well & truly DONE. The split is HISTORY. We move on; forward & UPWARD.

Amusing that the options have NOT been re-priced as yet. I had heard that some options might NOT be re-priced till Tuesday, June 7, 2022. No big deal.

So, the option I show above is priced at $2,850 — for July 1, 2022. [SMILE. As I tell folks I am NOT GREEDY. ‘Slightly’ (which is very relative (in my case)) cautious when it comes to my sacrosanct cache of AMZN stock. I don’t want to get caught in a quick updraft. So, I give myself a LOT OF RUNWAY. Well, I was ultra-cautious the last few weeks with the split.]

This will get repriced to $142.50.

Yes, the same 20-to-1.

It, however, changes the DYNAMICS of option trading.

Prior to the split I had a $400 buffer between current price & MY CALL.

Post split this buffer is $20.

In terms of % it is still the same; 16%.

But, you can see how & why the dynamics shift. Takes a BIT to get a stock, even AMZN to go up $400 in a day of two.

Not so with $20! Just mentality.

So, I might have to ROLL it forward over the next few days. Need to see what the prices are.

But, I also now have 20 TIMES MORE OPTIONS.

Yes, I can’t wipe the grin from my face. I can get into so much mischief. SMILE.

I only have three addictions & luckily for me they are ALL HEALTHY. Red wine & option trading are two. SMILE.

Amazon (AMZN) 2022 20-to-1 Stock-Split: Most Unusual Split Ever!

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by Anura Guruge
on June 3, 2022

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Click to ENLARGE & study. Base graph from ‘MarketWatch.com‘ (with thanks).

The most unusual feature is that the split price was 12% LOWER than the stock price the day the 20-to-1 split was announced. That is highly unusual. The price should have gone up.

As you can clearly see from the above graph the price did, indeed, initially go up. That was what was expected. Then it tanked.

Yes, of course, the tanking of the price was due to the interest rate hikes & the fear of inflation.

It was also interesting that there was no flurry of buying prior to the so-called (nominal) ex-split day, i.e., May 27, 2022. Folks finally appeared to have taken heed of my comments that there is NO ex-split day per se other than today, June 3, 2022 — the last day of trading.

Instead we saw the price go up Tuesday, Wednesday & Thursday of this week. That made sense & was par for the course. It was down 2.5% today, the last day, BUT there was two reasons for that: overall market conditions & folks taking profits knowing that they have a chance to buy the cheaper split stock on Monday.

So, the split did NOT help increase AMZN price — THOUGH we all know that AMZN price would be much lower IF NOT for the split. So, that is a relief.

I have been long AMZN for 10-years now! SMILE. Yep.

I doubt whether I will ever sell my AMZN holding! I option trade against my stock. As of Monday I will have 20 times MORE OPTIONS — quite literally! I am sanguine. I am cool. I keep on smiling. I am sure that this time next year AMZN will be around $180 IF not higher. Mark my word.

Amazon (AMZN) NOW SPLIT Will Start Trading Monday, June 6, 2022, At New Price Of $122 — $123.

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by Anura Guruge
on June 3, 2022

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Click to ENLARGE & study. Base graph from ‘MarketWatch.com‘ (with thanks).
Click to ENLARGE & study. The SPLIT is DONE. DONE!

It is DONE. Done. Price can’t change. The final close on Friday, June 3, 2022, was somewhere in the $2,447 to $2,451 range.

20-to-1 split. So, you get 19 additional shares for each one you own, BUT the price goes down by 1/20th. Hence, the $122/$123 price.

That is pretty attractive. You can now own a 100 AMZNs for $12,000. That is a bargain.

We will see MAJOR down says. Interest rates hikes are far from done. So, AMZN will still take some major knocks. But, by this time next year it should be close to $180. Mark my word.

Those of us who own AMZN should see the post-split shares in our accounts on Saturday, June 4, 2022.

Amazon (AMZN) 20-to-1 Stock Split: Only The LAST STEP, i.e., Actual Split Left.

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by Anura Guruge
on May 27, 2022

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Click to ENLARGE & study.
Click to ENLARGE. Base chart from ‘marketwatch.com‘ (of course).

Compared to other high profile stock splits, Amazon’s much anticipated 2022 split, so far, has been very muted & insipid. It went up a fair amount since the split was formally approved on Wednesday, but not by that much.

So, two of the lead-up steps to the split, i.e., the approval & the NOMINAL ex-split day (i.e., May 27) are NOW history. Only June 3 stands between the old shares & the split ones. The split will take place, after the markets close, on Friday, June 3, 2022. The split shares will start trading when the markets open on June 6, 2022.

To add a bit more spice, Monday, May 30, is a holiday, Memorial Day. So, there is only 4 days left of trading prior to the split.

Despite my admonitions many will continue to believe that it is now TOO LATE to buy AMZN stock that is going to get split. That is NOT true. You can keep on buying them till 4pm (Eastern) on Friday, June 3.