A stock split doesn’t change a given company’s fundamentals, nor does it improve the business environment for the firm; yet, stock splits have shown price appreciation in large tech companies which split their stocks.
AMZN chart analysis
Post split performance
As the stock split affects the options trading, CNBC’s Options Action hosted the President of Optimize Advisors, Michael Khouw, who explained the options activity seen post-AMZN split. Furthermore, as Khouw explained, it would be expected that the number of contracts that are going to be traded would increase since owning one contract prior to the split would give a holder a total of 20 contracts. This doesn’t mean that these 20 contracts are more valuable than the one that was owned prior to the split. Predictions made about a possible increase in retail interest of AMZN shares post-split occurred on the first day the shares started trading after splitting 20-for-1. Often times shares of companies that have undergone a split can outperform the S&P 500 index; however, that is never a given. The global macroeconomic environment and the company’s performance should still play a major role in determining the performance. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
