3 Top Stock-Split Candidates After Amazon and Alphabet – The Motley Fool

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Motley Fool Issues Rare “All In” Buy Alert
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
It’s nearly time to split. At least that’s the case for tech giants Amazon.com and Alphabet.
Amazon announced earlier this month that it plans to conduct a 20-for-1 stock split on May 25, 2022. Google parent Alphabet revealed in February that it intends to conduct a 20-for-1 stock split on July 15, 2022.
Such splits can sometimes cause a stock to rise because more retail investors could be likely to buy at a lower share price. It’s even possible that the mere announcement of a forthcoming split can give at least a temporary boost to a stock. With this in mind, here are three top stock-split candidates that could follow in the footsteps of Amazon and Alphabet.
Image source: Getty Images.
Tesla ( TSLA -0.32% ) did a 5-for-1 stock split nearly 1 1/2 years ago. At the time the split was announced, the electric-vehicle maker’s shares were priced at close to $1,373. Tesla stated then that it opted to conduct a stock split “to make stock ownership more accessible to employees and investors.”
Today, Tesla’s share price stands at around $1,000. It would be a stretch to attribute the stock’s tremendous gains since August 2020 to the stock split. However, there are more investors who were able to buy Tesla at one-fifth of its previous price.
It’s not surprising that some investors are now speculating that another stock split for Tesla could be on the way. The pressure for a split could intensify if Tesla’s share price increases more this year.
That’s a realistic possibility. High gas prices could make more Americans take a serious look at buying a Tesla vehicle, boosting the company’s already strong sales even more. Tesla also has a shot at landing a spot on the prestigious Dow Jones Industrial Average with a lower share price.
You won’t find MercadoLibre ( MELI -5.67% ) mentioned very often in a discussion of stock splits. That’s mainly because the Latin American e-commerce and fintech company has never conducted one in its history.
In addition, MercadoLibre’s management hasn’t placed a stock split high on their list of priorities. In November 2020,  Federico Sandler, MercadoLibre’s head of investor relations, told The Motley Fool:
We do appreciate the incremental liquidity and benefits of doing a stock split. But right now I think we have other things on our plate that we need to focus on. I would say we could do it, but I don’t think it’s in the short-term.
But MercadoLibre stock was flying high when Sandler made those remarks. The company’s shares have now plunged close to 40% from the peak set in September. The benefits that Sandler alluded to back then could be more appealing now.
Even with the steep sell-off in recent months, MercadoLibre’s share price remains close to $1,200. As we’ve seen with Tesla in the past, that’s a level where a stock split could warrant serious consideration. 
Regeneron Pharmaceuticals ( REGN 0.04% ) is in the same boat as MercadoLibre. The big biotech has never conducted a stock split since going public in April 1991.
So why would Regeneron think about a stock split now? Its share price is near all-time highs. Regeneron achieved massive success with its COVID-19 antibody therapy REGEN-COV. Other drugs, including Eylea and Dupixent, also continue to deliver strong sales growth.
Granted, Regeneron’s share price is still below $700. That isn’t in the same ballpark as the super-high prices for Amazon and Alphabet that prompted their stock splits. But Regeneron is certainly trading at a level where its management team might want to consider one.
The timing could also be right. The U.S. Food and Drug Administration (FDA) revoked Emergency Use Authorization for REGEN-COV in January due to its lack of efficacy against the coronavirus omicron variant. Regeneron is working on a next-generation version of the antibody therapy. In the meantime, a stock split could provide another catalyst for the stock.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Market-beating stocks from our award-winning service.
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 03/27/2022.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns as of January 1, 2021.

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.


Leave a Reply

Your email address will not be published. Required fields are marked *