When one of the biggest companies on the planet decides that it’s time to split its stock – people get excited.
And for good reason…
When a company the size of Alphabet (GOOG & GOOGL) decides to expand its shareholder capabilities – it creates all kinds of opportunities for growth – and that doesn’t just mean for the company itself.
Often, once one company decides to make a decision like this…
Others see the merit – and decided to follow in their footsteps.
THAT is the kind of opportunity that Wall Street needs right now as talk of inflation and rising interest rates seems to dominate the talking points all over the financial sphere…
And with Google being the first company to take that step – one has to wonder:
Will it start a trend on Wall Street?
What’s that ONE thing that excites you the most?
You know what I’m talking about…
What is that one event that gets you excited every time it comes around? What makes you unable to contain the anticipation you feel? What gets you positively giddy just because it’s around the corner?
That tends to change with each new stage of life, right?
For many kids, it was Christmas and the holiday season…
As people move into their teen years – that changes to Saturday night parties and maybe the high school football game.
As adults, maybe it’s that big vacation that you take every year.
The point is, we all have those sorts of things we look forward to – and when it comes to investors – that same idea holds true…
As there are definitely some events that make us as excited as a kid on Christmas.
For example, IPO’s are GREAT!
Watching a stock’s first week on Wall Street can be fun to watch…
Seeing the people that are behind it go against people simply buying to make a quick buck, and then trying to figure out which side will win, is riveting entertainment.
However, another GREAT event on Wall Street is a stock split.
For those that don’t know (I know you do… but I have to explain for anyone who’s new to the game), a stock split happens when the board of a company decides that they have room for growth – so they decide to split their stock to increase the number of shares outstanding by issuing more shares to current shareholders…
Which ultimately brings the price per share down. That’s it.
Now, most stock splits tend to be 2-1 or 3-1, meaning for each share of stock you own, you’ll get two or three in return equivalent to the same price of your single share…
But on February 1st, Google’s parent company, Alphabet, announced that the internet search engine titan would be doing a split – that is absolutely CRAZY. Not 2-1 or even 5-1…
No, Alphabet is going to be doing a whopping 20-1 split!
Right now, shares of Alphabet are trading at about $2700 per share. After the stock split (scheduled to take place in July), each share will be worth roughly $135.
That will bring a lot more investors on board, and thereby drive the value of the company up even further. However, as I’ve been hinting at – there’s another reason that people are excited about the Alphabet stock split…
Because stock splits can be infectious! Other companies may follow suit, setting up all kinds of profit opportunities for investors who simply cannot afford to purchase the number of shares they want.
Why would they jump on the stock split train? Well, maybe because most companies that split their stock tend to outperform the market, according to Bank of America.
In fact, S&P stocks that have split tend to gain an average of 25% over the next 12 months compared to the 9% gain for the index itself.
So, if a giant company can gain more value by issuing more shares, they’ll hesitate – as it does tend to lead to lower prices, but ultimately, they decide do it…
However, one brave soul needs to go first and start that trend – and this time – it’s Alphabet.
As I said, the split will bring in buyers…and every company listed on any index wants to bring in more buyers.
So, now that the door has been opened, a few (or maybe MANY) other companies may follow suit, which may be a very good thing for us.
If you’re wondering how this bull will keep running…
A stock split of Alphabet’s magnitude is a great place to start.
The idea here, though, is to keep your finger on the pulse…
And because the GorillaTrades system tracks and analyzes the data – our finger is always on the pulse.
Which is why we’ve become one of the most trusted names in our industry – we keep it simple – and do our best to help our subscribers get the most out of their opportunities because we pay attention to those little details.
We’d love to have you on during the next round of picks…
But understand if you’d rather go your own way. Just remember, we’re always here when you need us…
And keep your eyes peeled. Alphabet may be just one of many stocks to split…
Which may be an opportunity for you to grab a discounted piece of a huge pie!
“An investment in knowledge pays the best interest.” – Benjamin Franklin
