Amazon stock split, Google Next？
Google's parent company Alphabet has approved a 20-for-1 stock split, which is its first since 2014. According to $Alphabet(GOOGL)$ $Alphabet(GOOG)$ 's last close on June 14, it'll trade at the level of $100, just as $Amazon.com(AMZN)$ did.
Google's Shareholders will receive 20 shares per share at the end of the business day on July 15th. Each shareholder at the close of business on July 1 will receive, on July 15, 19 additional shares for each share of the same class of stock they own.
Stock split has the potential to increase liquidity and pave the way for multiple expansion, something that has eluded the stock. The company is arguably taking the right steps to earn a premium multiple including its aggressive share repurchase program.
Amazon has lost more than 16% since its split on June 6, mainly due to the retreacement of the market. The feds is facing an unexpected inflation, with little possiblity to control.
Will investors buy Google ahead of its split?
Google represents one of the most compelling risk-reward opportunities still available in the market today. In the last quarter, GOOGL generated $15.3 billion of free cash flow and spent $13.3 billion on share repurchases as well as $2.9 billion on payments related to stock-based award activities. In other words, GOOGL has finally taken upon a capital allocation policy that I have been vouching for quite a while.
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