Just a hunch. But, I could be wrong. It doesn’t really matter to I. As some of you know I have BIG into AMZN for many, many year. That said, I do like splits. Why? Two reasons, both of which were amply demonstrated with Tesla’s split last year. These being:
- News of the split will drive the price up. It shouldn’t, but it always does! So, that would be fun. Yes, the price will fall, but the run-up is exciting & some can profit majorly — though not I. I rarely sell any AMZN shares. I am in AMZN for the long-haul.
- A 10-to-1 split will open up MORE opportunities for option trading. That is the BIG DRAW as far as I am concerned. You can ONLY trade options in 100-share blocks. With AMZN’s $3,000+ price amassing 100-shares is expensive –> $300,000! But, following a 10-to-1 split it would be 10 times easier. SMILE. You will only need $30,000. HUGE difference. I talked about this with TSLA. Yes, I benefited from this with TSLA. Think about it.
As the stock chart above shows there has NOT been a split of AMZN this millenia! It has been over 20-years. At $3,000+ the price is ripe for a split, & 10-to-1 sounds good to 1. Even a 5-to-1 will not be bad.
However, I think that Jeff Bezos’ departure in June is the real catalyst & motivation. Jeff has already wrought miracles in terms of both the company & AMZN stock price. But, a split prior to his departure will give the AMZN price another spike. That would still be under Jeff’s tenure. When history is written that spike will also be credited to him. So, rather than leave when AMZN was at (say) $3,250, it might go as high as $4,500 (pre-split). Will make Jeff’s legacy that much richer. Think about it. SMILE.
Check Category: ‘Investments’.