Finxpd
    Facebook Twitter Instagram
    Finxpd
    • Home
    • Education
      • Cryptocurrencies
      • Stocks
      • Forex
      • Commodities
      • Economies
      • Investing
      • Technologies
      • Career Planning
    • Financial
      • Credit cards
      • Banking
      • Insurances
      • Retirement Planning
      • Taxes
      • Brokers
      • Regulations
      • Funds & Loans
    • Reviews
      • Popular Brokers
      • Popular Savings Accounts
      • Popular Credit Cards
      • Popular Personal Loans
      • Popular Student Loans
      • Popular Stocks
      • Popular Low Spread Brokers
      • Popular Insurances
    • Comparison
      • Broker
      • Stock Investment
      • Cryptocurrency Exchanges
      • Financial Advisors
    • About us
    • Contact
    Finxpd
    Home » Stock Splits in 2022: An Interesting Stock Event
    Stock Splits in 2022 An Interesting Stock Event
    Education

    Stock Splits in 2022: An Interesting Stock Event

    October 11, 2022Updated:October 11, 20226 Mins Read61 Views
    Share
    Twitter LinkedIn

    When a firm announces a stock split or reverses stocks split, there is a lot of attention. A stock split occurs when a corporation either multiplies the number of shares issued or divides existing shares to increase the total number of outstanding shares while simultaneously decreasing the per-share price. While a split will reduce the per-share value, it will not affect the value of the underlying company or the total value of your holdings.

    However, lower stock prices for a rising business draw attention from regular investors. Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA) saw their share values skyrocket after announcing a 4-for-1 split in August 2020 and July 2021, respectively.

    In 2022, several notable splits grabbed attention. The specifics of a stock split and other relevant information are provided below.


    List of Contents

    • Understanding the Meaning of Stock Splits
    • Stock Splits in 2022
      • Amazon
      • Alphabet
      • Shopify
      • DexCom
      • Tesla
      • Palo Alto Networks
    • The Explanation For Stock Splits

    Understanding the Meaning of Stock Splits

    Understanding the Meaning of Stock Splits

    Increasing the total number of shares in circulation while decreasing their value is the goal of a stock split, a corporate move taken by firms. So, when a corporation’s stock price goes up, its shareholders’ returns go up. However, the stock price may rise, so new investors find it prohibitive to purchase shares.

    Each outstanding stock in a corporation is divided into a predetermined number of new shares whenever a stock split occurs. Affected shareholders will receive several shares equivalent to their pre-split holdings in the corporation.


    Stock Splits in 2022

    Extensive technology businesses, which have experienced significant growth this year and anticipate continuing that trend for the foreseeable future, have led the way in stock splits this year, as is typical.

    COMPANYSTOCK SPLIT RATIOANNOUNCEMENT DATEEX-DATEPAYABLE DATE
    Amazon (NASDAQ: AMZN)20-for-1Mar. 9, 2022May 27, 2022Jun. 3, 2022
    Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG)20-for-1Feb. 1, 2022Jul. 1, 2022Jul. 15, 2022
    Shopify (NYSE: SHOP)10-for-1Apr. 11, 2022Jun. 22, 2022Jun. 28, 2022
    DexCom (NASDAQ: DXCM)4-for-1Mar. 25, 2022May 19, 2022Jun. 10, 2022
    Tesla (NASDAQ: TSLA)3-for-1Aug. 4, 2022Aug. 17, 2022Aug. 24, 2022
    Palo Alto Networks (NASDAQ: PANW)3-for-1Aug. 22, 2022Sept. 6, 2022Sept. 13, 2022
    Data source: Company financial filings. Adapted from Nicholas Rossolillo, The Motley Fool.

    Amazon

    Amazon

    For shareholders of record as of May 27, 2022, Amazon’s board of directors approved a 20-for-1 stock split in March 2022. Due to its rapid and sustained expansion over the years, Amazon stock currently fetches a price per share of over $2,000. After the split, the price per share will be a little over $100, down from the current level of over $200. Amazon’s shares were last split on Sept. 1, 1999, at a ratio of 2-to-1.


    Alphabet

    Alphabet

    While reporting earnings for the fourth quarter of 2021 in February 2022, Alphabet also announced a stock split of 20 for 1. On Jul. 15, 2022, for each share of stock owned on Jul. 1, 2022, shareholders of record will be issued 19 extra shares. Before changing its name from Google to Alphabet, the corporation divided again in the early years of 2014.


    Shopify

    Shopify

    Shopify’s co-founder and current CEO, Toby Lütke, will retain his voting control over the company according to revisions announced in April 2022. The business also said it would perform a 10-for-1 stock split on Jun. 28, 2022, for stockholders of record as of Jun. 22. As part of its strategy for sustained expansion, the maker of e-commerce software hopes to broaden the pool of people who can buy shares in the company. Since its initial public offering (IPO) in 2015, this will be the first time Shopify stock has split.


    DexCom

    DexCom

    DexCom, a provider of glucose monitoring equipment, recently announced a 4-for-1 stock split for March 2022. For stockholders of record as of May 19, 2022, the business will distribute new shares on Jun. 10. For DexCom, this is the first stock split in the company’s history.


    Tesla

    Tesla

    The Securities and Exchange Commission (SEC) received a report from Tesla in late March 2022 detailing the company’s intention to present a stock split proposal to a vote at the upcoming annual shareholders meeting. The three-for-one split was adopted during the company’s annual shareholder meeting on Aug. 4, 2022. Back in August 2020, Tesla completed a 5-for-1 stock split.


    Palo Alto Networks

    Palo Alto Networks

    In August 2022, Palo Alto Networks, a leading cybersecurity company, said it would begin a 3-for-1 stock split. Prices were modified for trading on Sept. 14, 2022, the day after the separation was finalized. Palo Alto Networks’ stock split for the first time.


    The Explanation For Stock Splits

    The Explanation For Stock Splits

    Both forward and backward stock splits don’t affect an investor’s percentage ownership in a firm or its intrinsic value. For instance, if you have a pizza slice representing a quarter of the overall pie, you can still get a quarter of the pizza even if you divide it into eight equal pieces.

    What business reason may there be for a stock split if it doesn’t alter the company’s structure in any significant way? Attracting new investors is often a driving factor. Numerous small investors are attracted to a famous company when its share price drops.

    Furthermore, many publicly traded companies provide employees with stock-based pay that gives them a stake in the company. With a lower stock price, it’s easier for companies to control the benefits they offer to employees.

    In addition, many businesses offer returns to their stockholders through share repurchase programs. Once again, a lower per-share price can help a business control costs and maximize shareholder returns.

    Consider the success of Amazon. The company stated in its filing for a stock split that “The Stock Split would allow our workers more choice in how they handle their equity in Amazon and make the stock price more accessible to others wishing to participate in the company.”


    A stock split is not a good reason to invest in a firm if you want to hold onto your shares for more than a few years. There may be valid business reasons for a firm to initiate a split, but it doesn’t alter the fact that shareholders still get the same amount of value from the company.

    Instead, investors should consider the company’s long-term secular growth trends, growth relative to its rivals, profit margins, balance sheet health, and other variables before considering whether to invest based on a stock split.

    Related Articles:

    • Reverse Stock Split: An Overview and What You Need to Know
    • Employee Stock Options (ESOs): All You Need to Know
    • Stock Float: Definition and Importance You Should Know
    • When to Sell Stocks for Profit and Loss
    •  Operating Margin: Important Financial Performance Indicator

    Read more: Stocks

    Source: Fool

    Stocks
    Share. Twitter LinkedIn

    Related Posts

    5 Best Investing Blogs in Vietnam You Should Know

    February 3, 2023

    Scarcity: A Powerful Marketing Tool

    February 2, 2023

    Dark Pools: Interesting Facts You Should Know

    January 26, 2023

    7 Best Growth ETFs to Buy for 2023

    January 25, 2023

    POPULAR

    Yield Farming VS Staking: Which Is the Better Long-Term Investment?

    June 23, 2022

    The Differences between Investment and Speculation Investors Must Know

    June 8, 2022

    What is Cryptocurrency? (New Edition 2022)

    June 7, 2022
    Risk Disclaimer: Finxpd will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals and Forex broker reviews. The data contained in this website is not necessarily real-time nor accurate, and analyses are the opinions of the author and do not represent the recommendations of Finxpd or its employees.

    Currency trading on margin involves high risk, and is not suitable for all investors. As a leveraged product losses are able to exceed initial deposits and capital is at risk. Before deciding to trade Forex or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite. We work hard to offer you valuable information about all of the brokers that we review.

    Menu
    • Home
    • Education
    • Financial
    • Reviews
    • About us
    Top Insights
    5 Best Investing Blogs in Vietnam You Should Know
    February 3, 2023
    Scarcity: A Powerful Marketing Tool
    February 2, 2023
    Twitter LinkedIn YouTube TikTok
    • Home
    • Education
    • Financial
    • Reviews
    • About us
    Copyright © Finxpd 2023. All Rights Reserved

    Type above and press Enter to search. Press Esc to cancel.