Shopify & Amazon : Stock Split Growth in June β22π
Several companies have announced stock splits this year. While investors were initially enthusiastic, that sentiment has faded as macroeconomic headwinds have pummeled the market. The growth-heavy Nasdaq Composite is now down 28% from its high, and many popular stocks have fallen even further.
For example, the stock prices of Shopify (SHOP 0.43%) and Amazon (AMZN -3.84%) have fallen 78% and 41%, respectively. Both companies plan to split their common stock in June, making the share price more accessible for investors. More importantly, Shopify and Amazon are key players in the multi-trillion-dollar e-commerce industry, and both stocks are trading at bargain prices.
1. Shopify
Shopify simplifies commerce. Its software helps businesses manage sales, orders, and inventory across brick-and-mortar stores and various digital channels. That includes online marketplaces like Amazon and Walmart, as well as branded websites, mobile apps, and social media. Through its platform, sellers can also access critical services like payment processing, marketing tools, and small business loans.
In short, Shopify is an end-to-end solution for omnichannel commerce, and its software empowers businesses to grow their own brand across multiple sales channels. That value proposition differentiates it from Amazon, and it has made Shopify the most popular e-commerce software vendor, both in terms of market presence and user satisfaction, according to a G2 Grid Report. For context, Shopify powered 10.3% of online retail sales in the U.S. last year, which puts it in second place behind Amazon.
As a final thought, CEO Tobias LΓΌtke recently purchased $10 million in Shopify stock, and other executives have made similar moves. That strongly suggests LΓΌtke and his team believe the business will be worth more in the future. And with shares trading at 9.5 times sales -- their cheapest valuation in five years -- now looks like a great time to buy this beaten-down growth stock.
2. Amazon
Amazon operates the most visited e-commerce marketplace in the world. In 2021, its platform powered 41% of online retail sales in the U.S. To reinforce that edge, the company has continued to grow its logistics infrastructure in recent years, enhancing its ability to control shipping costs and delivery times. In fact, Amazon actually has excess capacity in its fulfillment and transportation network, according to CFO Brian Olsavsky.
Amazon's latest earnings report underwhelmed Wall Street. The company posted its first quarterly loss since 2015. But investors that cashed out overlooked a few important details. Its cloud computing business -- Amazon Web Services (AWS) -- captured a 33% market share in the first quarter, outpacing second-place Microsoft Azure by 12 percentage points. Financially, AWS's revenue growth accelerated to 37%, and its operating margin expanded 450 basis points to 35.3%. That makes AWS far more profitable than Amazon's retail business.
To that end, Amazon's bottom line has grown more quickly than its' competitors. Here's the big picture: Amazon has a strong presence in three important industries, leaving plenty of room for future growth. And with shares trading at 2.3 times sales -- their cheapest valuation in the last five years -- chances are you'll regret not buying this growth stock on the dip.
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$Shopify(SHOP)$
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Amidst the continuing tech stock sell-off, e-commerce leader Shopify (SHOP -7.02%) made headlines last week as the latest tech giant to announce a stock split. Apple and Tesla both completed stock splits in 2020, while semiconductor giant NVIDIA completed its own split last year. Even more recently, FAANG giants Alphabet and Amazon both announced stock splits, which are scheduled to occur this summer.
Per the terms of Shopify's proposed 10-for-1 stock split, investors would receive an additional nine Class A or B shares for every one share they hold. However, Shopify CEO and founder Tobi LΓΌtke would receive a special "founder share," effectively giving him total voting power of 40% when combined with his existing Class B shares. Shareholders are set to vote on the stock split on June 7.
$Amazon.com(AMZN)$
The research analysts who study stock splits, seem to suggest that it's better to buy after a stock splits, so you can monitor the game after it shoots higher and buy at the dips.
Keep in mind that "some of the outperformance is likely due to momentum," the analysts wrote in a research note published after Amazon announced its split.
"Once the split is executed, investors who have wanted to gain or increase exposure may start to rush for the chance to buy." Ultimately, a company's underlying strength is what drives the direction of a stock, they wrote.
$Amazon.com(AMZN)$
Back in March, Amazon (ticker: AMZN) announced a 20-for-1 stock split, which is now being implemented. With the start of the new trading week, each Amazon share becomes 20 shares. The stock, which on Friday dropped 2.5% to $2,447, should open Monday with a price of about $122. Amazonβs share count will jump from 509 million to 10.2 billion.
$Amazon.com(AMZN)$
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Dave Clark, CEO of Amazon's worldwide consumer business and a top lieutenant of Andy Jassy, will resign July 1 after 23 years at the company, Amazon announced in a regulatory filing Friday.
Clark joined Amazon in May of 1999 in its operations division and quickly rose through the ranks, serving as a key force behind the expansion of its logistics and fulfillment network.
Amazon did not name a replacement for Clark, who said in a note to employees, that "it's time for me to build again."
$Amazon.com(AMZN)$
Amazon is not amazing anymore. First, investors who are interested in buying Amazon at the new price might not do it immediately. Experience with Amazon shows investors may have several buying opportunities post-split before the shares truly take off. For instance, after the last split -- on Sept. 2, 1999 -- the stock gained. But then it came back down a few times before finally increasing for the rest of the year.
$Amazon.com(AMZN)$
CNBC maintains that Amazon (AMZN) are a Strong Buy ahead of their announced Stock Split in effect tomorrow 6th June 2022. Calling several tech giants "colossal losers," Cramer pinpointed Amazon, Facebook-parent Meta Platforms and Google-parent Alphabet β three members of his now-discarded FAANG acronym β as names that will rebound. The other FAANG companies include Apple and Netflix.
Here's why Cramer believes those three 'losers' will rally:
Amazon
Cramer said that he believes the company could boost its stock valuation if it culls warehouses and workers, takes a more aggressive approach to retail advertising and keeps its Amazon Web Services robust.
"Amazon is a company that could earn $82 a share in 2024. Now, before you laugh about me using 2024 estimates, remember that 2022 is almost half over," he said.
$Amazon.com(AMZN)$
The Stock Split is looming in a few days' time. Each AMZN stock will go down to $121.25 or thereabouts. So when do you sell after you buy the Stock Split if you are a short term trader?The answers lie in past stock split data.
Shares of Amazon.com Inc. charged 5.7% higher to $2,435.01 in afternoon trading, to put them on track for a fourth-straight gain. The ecommerce and cloud behemoth's stock has soared 17.0% in the four days since it closed at $2,082.00 on May 24, which was the lowest close since April 9, 2020. That would be the stock's best four-day performance since it ran up 17.9% over the four-day stretch that ended April 16, 2020. Amazon disclosed late Friday that its shareholders had approved an amendment to its restated certificate of incorporation to effect a 20-for-1 stock split
$Amazon.com(AMZN)$
It all adds up to a good-looking buy for AMZN shares today
Amazon will split its stock on June 3, which isn't very far from now. Stock splits usually lead to increased interest from retail investors.
Looking at Amazon (AMZN) financial figures is incredible, it's a behemoth of a company crossing a lot of a whole country's GDP.