Goooooooooogle’s 20:1 Split

Google Crushes Q4 Earnings Forecast, Plans 20-For-1 Stock Split

Wow, Google is splitting 20:1 effective on July 15. Congrats to all the share holders and my former teammates! Here are my early reactions.

Only if someone had thought about this earlier?

Disclaimer: I’m not a financial advisor. These are just my opinions. Do your own homework, blah blah blah.

I think it’s great that Google is splitting. A price point of $2800+ has psychological barriers. People think it’s too expensive to buy, and I think limits the stocks ability to breakout.

Liquidity

As I’ve mentioned before, a split isn’t just a math exercise. It’s not just smaller slices of the same pizza. Rather, a stock split is like sub dividing a large 20 acre single family home lot into 20 one acre lots. Instead of having one big house to buy/sell, now you have 20. Splitting creates liquidity, and liquidity generates value.

Psychology

Splitting the shares also has psychological effects. For example, it’s cheaper for retail investors to buy. Not everyone wants to or is able to buy fractional shares. As I’m learning with TSLA, human behavior is just…