Google Stock Split

[q6543]

The Google split is huge!!
Watch a year out... what it unlocks is a F load of people being able to sell calls/write puts that previously needed to swing 300k around to cut a single contract.

It allows maximized capital efficiency

It unlocks significant derivative value...
Amzn really needs to do this, bezos was a dick about it.

Google will have a 5T market cap in no time.

 

[roy_1031]

Is anyone going to buy when the stock splits 20:1?

Which stock do you need to buy to get in on the split, or are they both splitting? GOOG or GOOGL.


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[Adower]

Which stock do you need to buy to get in on the split, or are they both splitting? GOOG or GOOGL.


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The Google class A and C are splitting. The class B which is for founders is not splitting.

 

[Klaus]

Ok. We'll see in July!

I'll be the first to admit saying it would 10x in a week was lofty. I do think the yield will be more than it would be before the split. Time will tell. I have no problem being wrong.

Post script: splits are irrelevant. All of the signal occurred on the Feb announce date. The split date itself was meaningless. Candlestick graph is GOOGL, blue line is Nasdaq 100. Circles are announce date and split date. Post split you would have done better by buying the Nasdaq 100 ETF.

 

[13COBRA]

Post script: splits are irrelevant. All of the signal occurred on the Feb announce date. The split date itself was meaningless. Candlestick graph is GOOGL, blue line is Nasdaq 100. Circles are announce date and split date. Post split you would have done better by buying the Nasdaq 100 ETF.

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I stand corrected.

 

[Tezz500]

Post script: splits are irrelevant. All of the signal occurred on the Feb announce date. The split date itself was meaningless. Candlestick graph is GOOGL, blue line is Nasdaq 100. Circles are announce date and split date. Post split you would have done better by buying the Nasdaq 100 ETF.

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Now Do AMZN

 

[Klaus]

Now Do AMZN

Just like every other stock splits have neither helped nor hurt AMZN share price performance.

 

[Tezz500]

Just like every other stock splits have neither helped nor hurt AMZN share price performance.

Lol I agree.

But damn I’m up 24% since buying at the split!

I think it was just good timing and really had nothing to do with the split though.

 

[Steve@TF]

When do we all buy rivian?!


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[03DSGMach1]

When do we all buy rivian?!


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That’s what I want to know

 

[Tezz500]

When do we all buy rivian?!


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Sadly all my Rivian funds are tied up in F. (Up 22.37%)

 

[Adower]

Post script: splits are irrelevant. All of the signal occurred on the Feb announce date. The split date itself was meaningless. Candlestick graph is GOOGL, blue line is Nasdaq 100. Circles are announce date and split date. Post split you would have done better by buying the Nasdaq 100 ETF.

View attachment 1758254

I dont know if you can say the split is irrelevant. There are studies that suggest that stock which split tend to outperform the market in the immediate years following the split. It's only been a month or so since the split. Way to soon to evaluate in my opinion.

 

[Klaus]

I dont know if you can say the split is irrelevant. There are studies that suggest that stock which split tend to outperform the market in the immediate years following the split. It's only been a month or so since the split. Way to soon to evaluate in my opinion.

Here is what you can do to determine the signal provided by a stock split.

1. Download tick by tick data for every stock that has split for time period pre and post announcement and pre and post ex date. 5 days before and after is a relevant time period.
2. Compare this to performance for the relevant sector for each individual company.
3. Run statistical analysis to determine statistical significance of the signal.

Once upon a time I was active in academic finance and received a grant to study and publish work on exactly this subject. What you will find is that there is an initial pop on the announcement that decays to 0 by the ex date. This pop is most pronounced for companies that announce their very first split (like GOOGL). This still decays to zero by the ex date (as it did with GOOGL). For each successive split the pop on announcement is less and less and eventually falls to zero.

This same phenomena is observed with dividend announcements and reverse splits. The countercase is Berkshire Hathaway, which has never split and has significantly outperformed the market. The punchline is that a pizza that is comprised of 8 slices is the same amount of pizza as the same pizza that is comprised of 4 slices.

 

[Klaus]

Here is a discussion of the topic if you are interested. Note that all of the analysis is post announcement not post execution.

Long‐Run Common Stock Returns following Stock Splits and Reverse Splits on JSTOR

Hemang Desai, Prem C. Jain, Long‐Run Common Stock Returns following Stock Splits and Reverse Splits, The Journal of Business, Vol. 70, No. 3 (July 1997), pp. 409-433

www.jstor.org