This is actually the closest guess so far, but still off a bit.Touchless said:My assumption is they are doing the split in place of a dividend? So you wouldn't be taxed on it like you would a dividend. Giving shareholder value through the split instead of dividend.Brian Earl Spilner said:If I have 4 shares, I sure as hell hope it doesn't mean my 76 other shares will come in as a dividend.Brian Earl Spilner said:What exactly does that mean? Honestly never heard of that before and no idea how that works.McInnis 03 said:"Split as dividend"Brian Earl Spilner said:
Wait, was there a dividend announcement for GOOGL?
This is a simple stock split, which means there is zero additional value created - it's simple window dressing, and has no financial impact whatsoever. It's not a stock dividend, which is a different thing entirely.
People get wrapped around the axle on splits because they're a self-fulfilling prophecy - - good companies' stocks go up and tend to split more often, therefore stock splits are "valuable". Companies whose shares trade in the same range have no need to split, and are "less valuable".
There are some tangible benefits to stock splits, such as it's marginally easier to sell part of your lot (although this is much less meaningful in today's fractional share trading capable environment). In options buying and writing, it definitely makes a difference, and makes more trading strategies accessible to retail traders.
Example: I own 10 shares of GOOGL (bought in 2018 for $991/share). After the split, I will own 200 shares. This will make it easier for me to write covered calls on 100 or 200 shares of GOOGL, which is a good thing for me (I will probably do so sometime soon after the split). I can't write a covered call on 10 shares, currently.
Long story short - - good companies tend to split their stock due to price appreciation. Splits themselves have no intrinsic value.