Motley Fool Money Stock Splits Matter
Jun 6, 2022
Jason Moser, a senior analyst from Motley Fool, delves into Amazon's significant 20-for-1 stock split and its potential short-term benefits. He highlights Bank of America's research on stock splits leading to 12-month outperformance and discusses Under Armour's recent drop from the S&P 500. Joining him is Matt Frankel, who breaks down the ins and outs of ETFs and offers simple investment strategies tailored for various investor profiles, making navigating the market more accessible and less daunting.
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Stock Split Psychology
- Stock splits don't change the fundamental value of a company.
- However, they can have a psychological impact on investors.
Stock Split Performance
- Research suggests that companies splitting their stock outperform the market in the short term.
- This is likely due to increased accessibility for smaller investors.
Amazon Split Rationale
- Amazon CEO Andy Jassy cited employee stock options as a key driver for their split.
- This aims to better reward and retain employees, especially lower-paid ones.