Eseandre Mordi
A stock split is a purely mathematical action that divides a company's stock into a larger number of shares with a lower price. No one gains or loses anything here, but it makes it possible for a smaller investor to become a shareholder.
Scott Redler made a suggestion to Amazon on Twitter to think about splitting their shares like Tesla and Apple did. He addressed the company's CEO in his tweet.
Hey @tim_cook$aapl listened years ago. @elonmusk and $tsla listened. Hey @JeffBezos$amzn. Listen up! Split $amzn 10 for 1 to reduce the barrier to entry and this way your stock isn’t a high priced target for Antitrust. Scott Redler (@RedDogT3) via Twitter
For a typical investor with minimal investment budget, a $3,000 stock can be difficult to afford. Even with the price tag would other buyers escape high-quality stocks. It is less of a concern these days as certain stock exchanges require you to purchase fractional equity options, and foreign-traded capital provides another means of preventing a big one-stop buying price.
Also, a high stock price does not allow it to be added to indexes, such as the Dow index. Most likely, this is why Elon Musk said that there will be a splitting of the company's shares in order to get into the S&P500 index.
Before proposing a similar scenario, Amazon's CEO, Jeff Bezos, will have to make a very significant division of stock. With a 15-to-1 split, Amazon will also hold land on the Dow at the top five share rates.
Eseandre Mordi
