Amazon(AMZN), Alphabet(GOOG) Shopify(SHOP) and CIBC(CM) have all announced that they will be splitting their shares. What does that mean exactly? Well each company will be giving you a certain amount of shares depending on how many shares you currently hold. That also means that the share price will be divided by how many shares they are also splitting into. For example if a company is worth $100 a share and they do a 2 for 1 split that means that you will get 2 shares for ever 1 share you already have but the price will be cut in half to $50 a share.
So far Amazon has announced a 20 for 1 stock split that will happen around June 3rd, 2022(for shareholders as of May 27, 2022) and start trading at the new price June 6th, 2022. Amazon also announced that they are doing a $10 billion share buyback. Alphabet announced their 20 for 1 stock split and shareholders as of July 15, 2022 will receive their shares after that date in July. Shopify announced Monday that they are doing a 10 for 1 stock split for shareholders as of June 22, 2022 and the split will happen on June 28, 2022. Shopify’s stock split is still dependent on shareholder approval. Lastly CIBC announced a 2 for 1 split that will happen on May 16, 2022 for shareholders as of May 5, 2022.
In the last 2 years we have seen a lot of shares split and so far it has gone quite well for them. I personally jumped on the Telus(T) 2 for 1 share split and am up over 33%. Apple(AAPL) also did a split of 4 for 1 which they are also up quite nicely and Tesla(TSLA) did a 5 for 1 split who is up a lot as well. Stock splits don’t always work out for all companies though, Aurora(ACB) did a reverse stock split and they haven’t recovered from that yet. Reverse Stock splits aren’t as popular as normal stock splits(at least not usually with the big companies) but it still happen sometimes.
So what would it look like if all 4 of those companies did a split today? Well…
- Amazon is currently $3,110.82USD/share and after a 20 for 1 split would be about $155.54USD/share.
- Alphabetis currently $2,605.72USD/share and after a 20 for 1 split would be about $130.29USD/share.
- Shopify is currently $759.17CAD/share and after a 10 for 1 split would be about $75.92CAD/share.
- CIBC is currently $144.58CAD/share and after a 2 for 1 split would be about $72.29CAD/share.
I personally feel like this is a great opportunity for us retail investors to get into some of the biggest companies in the world. I honestly never even thought of buying Alphabet or Amazon because their share price was always so high but now I can afford to buy multiple shares of each company. I have actually already started to buy shares of CIBC because right now Canadian banks have been taking a beating and are having a really big pull back(BOC announced another rate hike today). I am definitely going to be taking advantage of this pull back and will continue to buy as many shares as I can before the split and will continue to do so after, you can never go wrong with the Canadian banks.
That is all for today and remember everyone, invest in yourself first.
*Disclaimer, all share prices are after market close as of today April 13, 2022. I currently only hold a position in CIBC but not Amazon, Alphabet or Shopify.