Stock split

Well, it looks like those who wanted a stock split finally got it. Hopefully it will do something to goose the stock price, though in this climate of high inflation, high gas and oil prices, and a raging war in Ukraine, who knows. But I will certainly enjoy suddenly owning 20 times more shares!

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Well, the day of the announcement, the price did goose (6%). Temporarily. Will be awarded June 6.

Besides the attendant euphoria that accompanies splits, there WILL be more folks attracted to the lower per share cost. Look for effect in June.

Added: The announced $10 billion buy back? Very small impact. Not sure why they even are doing it.

Further out: AWS will be spun out. Zero news about it today, but it seems inevitable. Major impact.

Finally: Overall I’ve seen a CAGR of 30% in the years I’ve held. Most recent years, it’s slowed down, to be sure. But AMZN isn’t going away any time soon. I can live very well on CAGR’s of 30%. Even 20%. I think I’ll stay for another five years at least.

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I have owned two stocks that split – AAPL and NVDA. Both have grown at a slower rate since the split than they were growing prior to the split.

AMZN has been a dud for be against the broader market. I bought shares in Spring 2020 and Spring 2021; overall I’m up 14.5%. Not bad maybe, but I be better off had I gone with SPY.

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AMZN has been a dud against the broader market.

A. Looking for gains in any short period on any stock simply isn’t realistic. ALL stocks will vary, some of the very volatiles will vary quite widely in short periods. Others, like AMZN, will vary, but with less dramatic changes. Over the long term tho (i.e. at least 2 if not 5 years), they will continue. If their biz model is right, their long term risk can be termed nil. (I noted my experience with AMZN coming in at 30% CAGR, and I can “live” with that.)

B. The split comes into effect two months from now; look for its psychological impact then.

C. AWS is a key (THE PRIMARY???) contributor to AMZN’s bottom line. Look for it to be spun out. Not concurrently with the split, of course, but certainly in well under 5 years. (Two years???)

The company is a key component of the eight stock port here, FWIW.