Cliff Notes: WHAT DOES AMAZON'S STOCK SPLIT MEAN? - podcast episode cover

Cliff Notes: WHAT DOES AMAZON'S STOCK SPLIT MEAN?

Mar 27, 202215 min
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Episode description

In this Cliff Notes we spoke about Amazon’s pending stock split and what it means for investors. We also covered China’s recent stock crash. #stocks #amazon #investing


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Transcript

Speaker 1

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Speaker 2

Made up Instagram posts about this a few weeks ago, and then spoke about this on Market Mondays when Google announced is stock split and I made an Instagram post, you know, one of those green screen things that everybody's doing.

Speaker 3

Now. By the way, cybar so.

Speaker 4

Gonna be diplomats, right, you have to talk with me with the London.

Speaker 5

Calling out name writer. We gotta be we gotta be diplomats. Come on, We're not doing that.

Speaker 2

But yeah, it was saying that you know, it could lead to Amazon, a stocksplat from Amazon.

Speaker 3

We talked about the market Monday's.

Speaker 6

And lo and behold, Yeah, Lo and behold.

Speaker 2

It's on record, so see you can see that it was documented on Market Mondays, Lo and behold. Last week Amazon announced a twenty to one stock split.

Speaker 7

The first thing I did was I think I called you first, and then I called I called it Ian. I'm like, yo, remember this man, when when when Bezel stepped down, this was the opportunity we got a new new CEO. This might be a new opportunity for him to say, all right, this is a great chance for us to get more investors inside the company.

Speaker 6

And lo and behold the day came. Yes, my stock of the year.

Speaker 2

So Amazon. All right, so Amazon, so let's talk about everybody wants to probably know about this situation, which isn't mean doesn't mean the stock is going to go out. You know every time a stocksplat is the same conversation. So Amazon. And it was interesting because when Google split, it was Amazon was the last thing, last big tech company to have a four digit stock price, and you know, it was rumors that, you know, that could be the next stock to split. And they ain't even they an't

even waste too much time. They a couple of weeks later they stay announced that their stock split. So what does this mean for Amazon?

Speaker 6

It means exactly what we thought with the other ones.

Speaker 7

Right, Like, when I look at Amazon stock, if a retail investor looks at Amazon stock and see that thirty two hundred is not as appealing, right, That feels like I can't afford it, or I'm going to have to get a fractional share. With the split twenty to one, which is a pretty large split. Now you're looking at maybe one hundred and thirty dollars a share, and more

enticing for a retail investor to get involved. It also is important if you go back to the Josh Brown episode, the last last time he was on market Monday, is he talked about why these companies break down and split and get to these numbers in the hundreds, right, so they could be included in the dal Jones. It was an excellent explanation. If you haven't seen it, go check that out. But that also is a factor in as well. But I just want to make sure that everybody's clear

that nothing changes fundamentally inside the company. It's just the price has changed, right, And so I always explain it as if somebody had a five dollar bill or five singles, do you still have five dollars? Essentially you do, right, it's just in a different form. And so when you look at a stock, go from three thousand down to one hundred or two hundred. It's pretty much the same thing. It's just that now more retail vestors can now piling

into the stock. They also bought back ten billion dollars what was it, ten billion worth of stock. Yeah, So like these type of moves when you start seeing things like this happen, and it was like, Yo, this is why I was saying this. I didn't even take this into account when I was saying that, you know, Amazon's gonna be my SoC of the year. I was looking at all the fundamental things, but like, this is one of those things. Obviously, the market is in the downtren

right now is the nastak is in a downtrend. But long term, this is why I'm like, all right, gotta get Amazon. Gotta get Amazon.

Speaker 6

On top of.

Speaker 7

Being the number one e commerce is going to be the number one shipping company, passing Ups and FedEx in the next this year. There's just so many things that I feel like Amazon is just like going to be this incredible company that it already is and it's going to keep building upon it.

Speaker 8

Yeah.

Speaker 5

Before the last fifteen months, every week somebody in stock club is like, man, why do you keep Amazon as a retirement pick. I'm like, just wait, put yes and chat. Some of y'all are killing me, man, are you sure? I'm like, give it time, Bezos. For those of you who don't know, he came from the hedgehot industry, so there's a calculated reason why he didn't wanted to split. But with the new executive it gives him a great advantage.

Like you said, it goes into the dal Jones. And then of course it's one of like it's in my top ten businesses as well. So like Apple, Microsoft, Google, Saudi Aramico, Amazon, they're in that list of companies that if I have to, like put my life on the line, I would invest money with them.

Speaker 8

So continue to hold them for the long term. They'll be great.

Speaker 5

And then me and me, I'll see a question. We'll talk about mydnea tonight on the stock club call. But yeah, Amazon, it's gonna be great for another ten or fifteen years.

Speaker 8

Easily hold on to it.

Speaker 3

When is the stocks Did they give a date?

Speaker 8

I don't know the date off the top of my head.

Speaker 6

Yeah, I'll get the question is gonna be when should I buy Bight after.

Speaker 5

We're gonna give a clean answer, Mike clicks us up. If you haven't bought it yet and you can't afford it in the two thousands, wait till after, and then put it in one of your core holdings. That's been like a little secret in stock Club. It's been in the retirement picks forever. Amazon's one of the ones red Pan. The police put red Pan in Chat so they can see that I'm not lying to capping, even though this crystal ball is going bright in the background.

Speaker 4

Listen, if we all called it unanimously.

Speaker 3

I mean, yeah, Amazon can't can't go wrong with Amazon Earners.

Speaker 6

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Speaker 7

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Speaker 9

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Speaker 3

Sponsored by the United States Department of Homeland Security. Good good, good move to split his stock.

Speaker 2

I feel like that's only going to, you know, drive a lot more retail money into it, and just by the law of numbers, right, It's like a stock is two thousand dollars on three thousand dollars, like you know, for it to get to six thousand dollars a big increase of only four hundred percent with you know, something is one hundred and twenty dollars, you know goes to two hundred and forty dollars. That's a lot more feasible. Apple has split a variety of different times throughout the

course of their history. Google just split, Testless split last year. Amazon is about to split some video. Yeah, it just makes sense run.

Speaker 5

It out on Disney too, because now me but because now when you have to pick between the two, since the price is cheaper, now you're going to have to say, it's like getting Lebron at five million a year. I may like Pat Beverley at five if I can get Lebron. Though, now you have to make some tough decisions about what I'm what am I going to have in my portfolio? If I'm going.

Speaker 8

Based on price that I have available, you have a superstar available for pretty much a rookie contract. Your portfolio hard to turn down.

Speaker 7

They're doing something interesting with their streaming service right now. So Disney Plus and they kind of announced it like sublimately, but they're going to be having different tiers now. So like if you have Disney Plus, you know, you just played that one tier or the tier that gives you ESPN and they all these other things. But they're gonna have another tier where you can have advertisement or non advertisement. So that's just another revenue stream on top of what

they're doing. Streaming service is doing incredible, it's almost I mean, it's gonna catch Netflix within the next three to five years. But having that ad service in it now you're talking about more revenue on top of the parks opening.

Speaker 6

I just saw that Disney Paris. Disney Paris reopened.

Speaker 7

So it goes my good company Disney again. The stock split for Amazon though May twenty seventh, it goes in effect May twenty seventh, so that's when it'll split.

Speaker 2

There you have it, Ladies and gentlemen, China stock stuff is worst sell offs in two thousand and eight. It's now a good time to buy.

Speaker 3

China China.

Speaker 7

I mean, I think we can't talk about whether to buy or not until we understand why it hit its lowest points in two thousand and eight. So obviously, and if anyone wasn't paying attention COVID. COVID is back in China, and so they closed down factories. So they closed down factories, which led to the cell of But so I mean, obviously the way they handled COVID in the early stages was a lot different than we did, and so they

weren't they didn't have the type of outbreak. But there are certain cities right now in China that are noticing outbreaks.

Speaker 3

And so what's happening is the cities.

Speaker 6

Well Shen'sen Shen's Hand, which.

Speaker 7

Is was is key for a lot of technology companies, including Apple. I think one fifth of the production happens in the city. And so since there's an outbreak, they've closed down factories for six days.

Speaker 6

That's the minimum.

Speaker 7

They got to close them for six days and anything. If they don't see numbers changing, then they extended. And so you shut down production for six days, shut down a lot of business for a lot of companies. And so you know, the the market got hit, Shansen got hit. So you're looking at a bunch of sectors and including like gambling and travel companies as well.

Speaker 6

Right, so it's interesting.

Speaker 7

Like we're looking at it here in New York, Like I know, since we've been back in over the past week or so, it's like, all right, well, you know, it feels like it's a little bit it's kind of open. And so they hear COVID and hear China again. I'm like, nah, not again.

Speaker 6

We can't.

Speaker 5

Don't do this, I mean, and once again, we are one of the few countries that less the companies run our country. And also too, when you guys are investing in Chinese companies, even in publicly traded markets, you need to make sure that you're actually owning shares of that company and not offshore accounts.

Speaker 6

That is a fact.

Speaker 3

Now.

Speaker 7

That is something like when the fine print when you try to buy shares of these companies, like if you try to buy shares of Ali Baba, look at the fine print and what you're actually getting.

Speaker 6

I don't want to bring up the looking but I will. I will.

Speaker 7

When I did look at Coffee, I looked at the fine line and I looked on and I'm like, wait, I'm actually not buying shares of the company.

Speaker 6

I'm buying like well.

Speaker 7

And so like that like doing that type of homework we're doing every let me do all right, well, Okay, here comes the rug.

Speaker 4

Do you or do your right rest in peace?

Speaker 8

Pop smoke.

Speaker 4

Listen when we say do your own research, go look.

Speaker 5

This isn't a conspiracy theory either, like go look and see when you actually buy what you're getting, you have to be very careful. And then the way that government runs their country is how most countries are ran, so you have to be careful. And then when Jack Majus, you know he went to his meditation retreat for a few months, that was indicative of what's to come.

Speaker 4

Now.

Speaker 5

If Ali Baba those twenty percent underneath it is all time low, I would definitely take a look at it. My graduates from my school being forced bad drop bag drop, Mike drop bad drop drop.

Speaker 10

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