Google Makes a Discount for Traders

Google Makes a Discount for Traders

When is Google's stock split?

Alphabet, the parent company of Google, will make the 1:20 split on July 15. After the closing bell, the stock's price will be divided by 20. As a result, it will become 20 times cheaper on July 18. At the same time, the number of Google shares will increase 20-fold. Simply put, if you got one Google stock on your account, it will turn into 20 stocks. What’s the catch? Let’s go through the things traders should know about the split!

Will the split affect investors?

The main thing to remember is that the Google stock split is a cosmetic change, which doesn't mean anything to the company's fundamentals or business model.

However, there are two reasons why stocks usually outperform after splits:

  • Investors view stock splits as a sign of management's confidence. 
  • Splits increase the stock’s liquidity by making shares more accessible to retail investors. 

When shares of a company are trading at a high price, there’s often less trading activity because fewer investors are willing to buy or sell the shares – it’s too expensive. When the share price is lower, there’s typically more trading activity because more investors are willing and able to trade the shares. Increased liquidity could make it easier for Google shareholders to buy or sell their shares when they want to.

A Google share was worth about $2000 before the split announcement. After the split, each share will cost about $100, meaning that even small investors can now afford buying some GOOGLE.

Overall, the split is a positive event for investors and traders. It will lead to more buying and selling activity in the future. While the stock split itself doesn't have any bearing on Google's fundamentals, it is still a positive sign for the company's prospects.

Technical outlook

GOOGLE, daily analysis

GOOGLEDaily.png

Currently, the price is consolidating between the $2370-$2500 resistance range and the $2020-$2120 support area. If it breaks above $2500, consider buying with the target at $2650.

On the other hand, if the price breaks below $2020, consider selling with the target at $1820.

Until then, sell GOOGLE at the resistance range and buy at the support area.

Do you want to get more trade ideas and insights? Subscribe to the @FBSAnalytics Telegram Channel!

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