The global stock split trend is back to being busy even though the Covid-19 pandemic is not over yet. Now, a number of large companies are planning to split their outstanding shares or stock split in the midst of uncertain conditions.
Amid Russia's invasion of Ukraine and the tightening of monetary policy from the Federal Reserve, Tesla, Amazon, and Alphabet are planning a stock split.
Quoting Reuters, Tata Steel's shareholders' meeting on May 3 will consider a proposal for a stock split.
“The meeting will also discuss the approval of the dividend distribution plan. Tata Steel's announcement states that this stock split will be subject to regulatory and statutory approvals.
While Alphabet which is the parent company of the internet search engine Google and the streaming platform YouTube. Alphabet's board of directors approved a 20:1 stock split. If this plan is approved by shareholders, it will take effect in mid-July.
Next up is e-commerce giant Amazon which announced its intention to also do a 20:1 stock split. If approved by shareholders, Amazon's stock split will take effect in early June and reduce its share price to around $169.
Less than a week ago, it was electric vehicle manufacturer Tesla's turn. Though Tesla and Apple started the euphoria of a stock split in the summer of 2020.
Tesla did not announce what type of forward split it would seek, but noted that shareholders would vote for its approval. That is likely to happen in the next few months during the company's annual shareholder meeting.
Citing The Montley Fool on Monday (18/4), there are still several other big brands that have the opportunity to do a stock split. First, Broadcom which was acquired by Avago Technologies in early 2016.
The most obvious reason for Broadcom to take this action is that its share price has increased 20-fold over the past nine years. Future stock splits will make the company's stock much more retail-friendly.
There is also a good chance that Broadcom's share price will rise higher thanks to its strong operating performance. The company generates most of its revenue from the wireless chips used in next-generation smartphones.
5G wireless infrastructure upgrades coupled with global supply chain challenges, have resulted in companies ordering production through 2022 and through 2023, according to CEO Hock Tan. By the end of 2021, the company's backlog will reach US$ 14.9 billion.
The next candidate, AutoZone, was the last to stock split its stock 28 years ago, with its stock rising from around $29 to $2,078 over that 28-year span.
AutoZone's substantive forward stock split will make its stock much more affordable for retail investors who don't have access to fractional share purchases. It will also almost certainly increase the company's daily trading volume, which could put it on the radar of more investors.
Lastly, Costco Wholesale which has carried out stock splits four times. The company's stock has skyrocketed from around $50, when it last did a forward split 22 years ago, to $570, on March 29. Costco is a branded company that more retail investors would probably buy if it were more nominally affordable.
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