Originally Posted by Rain Man:
Is this still coronavirus stuff? If so, either we'll all die and money won't matter, or we'll buy and make money when it comes back.
Airlines not flying to or from china...that hit airline stock, then OMG we have to gut fuel suppliers...OMG no one will go anyfuckingwhere [Reply]
Originally Posted by Buehler445:
Don’t have to come up with as much cash to buy a share
That's the only benefit.
Doesn't mean it makes the stock more valuable like so many seem to think. He's saying he'd be all over an Amazon stock split, and if that's true, just buy shares now. 1 at the current price vs 2 at a split is the same value if you're limited on funds. [Reply]
Originally Posted by lewdog:
That's the only benefit.
Doesn't mean it makes the stock more valuable like so many seem to think. He's saying he'd be all over an Amazon stock split, and if that's true, just buy shares now. 1 at the current price vs 2 at a split is the same value if you're limited on funds.
There's bound to be free advertising during the split which leads to the impulse buys that generally follow the news cycle. The lack of "sticker shock" can increase sales in people who had been on the fence as well. Ya, it really doesn't make sense, but sticker shock is a mental barrier of entry for many.
Even if these affects wear off over time, it can definitely increase the value on short term trades. No split, no hype bounce. The assumed bounce my be what moves it from "Meh" to "Lets give it a shot" for people who try to play the rest of the field's emotional responses. [Reply]
Originally Posted by lewdog:
That's the only benefit.
Doesn't mean it makes the stock more valuable like so many seem to think. He's saying he'd be all over an Amazon stock split, and if that's true, just buy shares now. 1 at the current price vs 2 at a split is the same value if you're limited on funds.
From a technical perspective, sure. You’re right. But companies don’t split who think there’s a chance it could go down.
Plus all the stuff ghak posted.
There is a lot of nuance that gets traded in the marketplace. [Reply]
Originally Posted by Buehler445:
From a technical perspective, sure. You’re right. But companies don’t split who think there’s a chance it could go down.
Plus all the stuff ghak posted.
There is a lot of nuance that gets traded in the marketplace.
So you agree it’s all psychological. Great.
The value of the stock is the same whether amazon is $2k or $1k is a share. You’d be in better shape to buy in before a split if you believe in the company.
Originally Posted by lewdog:
So you agree it’s all psychological. Great.
The value of the stock is the same whether amazon is $2k or $1k is a share. You’d be in better shape to buy in before a split if you believe in the company.
Thank you.
We’re talking past each other.
You’re saying that a guy shouldn’t buy a share on a stock split because INTERNALLY the valuation shouldn’t change. But not all trades are made that way.
There can be a substantial bounce IN THE MARKETPLACE after a split.
RunKC didn’t specify his strategy here. He could very well buy on the announcement, ride it awhile and get back out, capturing the hype wave. That isn’t necessarily a bad strategy.
Or
RunKC could be using news of a stock split as validation for recent gains that they aren’t just a run to stability on this coronavirus thing. Logic would dictate that if it was an unexpected bounce or unsubstantiated within the business, they wouldn’t split. Which wouldn’t necessarily be a bad strategy.
Or
He could be just looking for a lower cost into a share. Which wouldn’t necessarily be a bad strategy.
I agree with you in principle if you’re looking at a buy and hold strategy. But there are some things that RunKC could be looking at that could be sound strategies also. He just didn’t specify.