Is Amazon's Stock Split Starting to Pay Off?
The conventional wisdom is that when a stock price increases too much, small investors can't afford to buy. Companies can easily solve this problem, though, by conducting a stock split. The share price becomes affordable again. Small investors will then buy in droves, serving as a nice catalyst.
However, reality doesn't always follow the conventional wisdom. Amazon (NASDAQ: AMZN) conducted a 20-for-1 stock split in early June. Afterward, the formerly high-priced stock was easily affordable for small investors. But there was no catalyst. Amazon stock actually sank instead of soaring after its stock split.
Fast-forward to today. Shares of the e-commerce and cloud giant have skyrocketed close to 30% over the past four weeks. Is Amazon's stock split starting to pay off?
Source Fool.com
