Why Tesla, Google, and Amazon want to do stock splits
The biggest tech stocks are getting cheaper—or, at least, they seem that way.
On March 28, Tesla announced that it will split its stock for the second time in two years. The decision also follows similar plans from Amazon and Google parent company Alphabet to do 20-for-1 stock splits, drastically lowering their respective share price. If approved, Amazon stock will drop from about $3,300 to $165 while Alphabet will drop from about $2,800 to $140.
Stock splits don’t actually change the value of one’s stock holdings, but rather multiply one’s shares and divide the share price. This is a marketing move, designed to make a company’s stock more enticing to retail investors who feel uneasy about buying fractions of a share of stock—but research shows it actually works.
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