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With Google parent Alphabet (GOOGL) poised to complete its 20-for-1 stock split after the market close on Friday, the recent splits by Amazon.com (AMZN) and Shopify (SHOP) may give investors reason for caution. While GOOGL stock could get a boost, both AMZN stock and SHOP stock have retreated since their stock splits amid the bear market in tech stocks.
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In the long run, the stock splits could make the companies more affordable to retail investors. As it stands, institutional ownership is nothing to boast about at Google, Amazon and Shopify.
Google stock owns an Accumulation/Distribution Rating of C+, according to IBD Stock Checkup. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Both Amazon stock and Shopify stock own Accumulation/Distribution Ratings of D+.
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GOOGL stock dipped 2% to near 2,340 on the stock market today. AMZN stock fell 2.2% to 112.99. SHOP stock tumbled 7.2% to near 33.
In the case of Google stock, the stock split could pave the way for the tech giant to enter the Dow Jones Industrial Average, analysts say. But that may not happen until 2023.
Amazon’s 20-for-1 stock split took effect June 6. AMZN stock has retreated 9% since its split.
SHOP stock has retreated 6% since its split on June 29.
In 2022, Google stock has fallen 19% while AMZN stock is down 33%. SHOP stock has plunged 76%.
According to Bank of America, companies that announce stock splits see their shares gain 7.8% on average in the next three months, beating the S&P 500’s 2.1% gain in that time. One year after an announcement those stocks are up 25%, better than the index’s 9% average, says BofA.
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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