The Australian share market has had a very pleasing start to this week’s trading so far this Monday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has gained a pleasing 1.24% and is now well over 7,250 points.

But let’s dig a little deeper into the market moves and check out the ASX 200 shares that are presently topping the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

South32 Ltd (ASX: S32)

ASX 200 diversified mining company South32 is our first ASX share to check out today. So far this Monday a notable 12.86 million South32 shares have been traded on the markets. There’s been no news out of the company that might explain this elevated trading volume.

However, South32 shares have experienced a fairly dramatic jump in valuation today, which might. This Monday’s session has seen South32 put on a healthy 3.29% so far, with the miner now sitting at $4.87 a share.

Tabcorp Holdings Limited (ASX: TAH)

Next up today we have ASX 200 gaming company Tabcorp. Tabcorp has watched a sizeable 26.92 million of its shares trade hands as it currently stands today. Tabcorp is having the opposite scenario play out so far today. Its shares have taken a nasty 3.4% haircut back to 98 cents a share as it currently stands.

Investors have been sending this company lower since it spun out Lottery Corporation Ltd (ASX: TLC) last week. So it’s likely the volume we’re seeing is a byproduct of this spinoff and today’s share price fall.

Pilbara Minerals Ltd (ASX: PLS)

Last but certainly not least in terms of trading volumes, we have ASX 200 lithium stock Pilbara Minerals. So far today, a hefty 27.08 million Pilbara shares have bounced around the markets. It seems another dramatic share price jump is responsible for Pilbara’s high trading volumes.

The lithium producer is currently up a pleasing 2.4% at $2.98 a share, but rose as high as $3.08 (up more than 5%) soon after market open this morning. It’s this big jump that has probably placed Pilbara at the pinnacle of this list today.

The post Here are the 3 most traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: AGL demerger scrapped, A2 Milk jumps
• Why these ASX coal shares could be ‘bigger than Ben-Hur’: fundie
• 3 ASX lithium shares set to roar back: experts
• Top brokers name 3 ASX shares to buy next week
• These were the best performing ASX 200 shares last week

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

BHP Group Ltd (ASX: BHP)

According to a note out of Macquarie, its analysts have retained their outperform rating and $57.00 price target on this mining giant’s shares. Macquarie remains a big fan of BHP post the demerger of its petroleum assets. It likes that the miner has exposure to a range of green commodities including copper, nickel, and potash. The BHP share price is trading at $44.73 on Monday afternoon.

Jumbo Interactive Ltd (ASX: JIN)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating on this lottery ticket seller’s shares with an improved price target of $25.50. Morgan Stanley feel that the market doesn’t appreciate the growth potential of Jumbo’s software business. Particularly given how management is aiming to generate half its revenue from this side of the business by FY 2026. This will be a big increase from the broker’s estimate of under 20% next year. Overall, its analysts are bullish on its outlook and see recent share price weakness as a buying opportunity. The Jumbo share price is fetching $15.62 today.

Westpac Banking Corp (ASX: WBC)

Analysts at Citi have retained their buy rating and $29.00 price target on this banking giant’s shares. According to the note, the broker believes that the major banks will see a swing from lending-derived revenue growth to deposit-derived growth as rates rise and credit slows. In light of this, it expects the current valuation gap between asset growing and revenue challenged banks will close. Citi prefers the latter in the current environment. The Westpac share price is trading at $24.26 today.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why I’d buy these 2 ASX 200 shares
• Brokers name 3 ASX shares to buy today
• The ANZ share price is ‘trading at its largest discount to its peers in 15 years’: Is this justified?
• Where next for the Westpac share price?
• ‘We’re close to the bottom’: Expert flags share market sectors to buy before the rally

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited, Macquarie Group Limited, and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Novonix Ltd (ASX: NVX) share price is taking off on Monday despite the company’s silence.

However, it’s not alone in the green. The battery technology and materials share is gaining alongside the S&P/ASX 200 Informational Technology Index (ASX: XIJ).

At the time of writing, the Novonix share price is $4.10, 9.92% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 1.19%.

Let’s take a closer look at what might be helping the ASX 200 tech stock higher today.

What’s going on with the Novonix share price today?

It’s a good day for the Novonix share price. And its day in the green is likely a welcome relief for those invested in the company.

Novonix came in as one of last week’s worst performing ASX 200 shares. It slumped 9.3% last week during which it announced a key member of its board had stepped down.

Additionally, the ASX 200 tech sector is leaping upwards today, likely due to data suggesting inflation in the United States may have peaked.

A US Commerce Department report released on Friday showed the nation’s personal consumption expenditures (PCE) price index rose 6.3% over the 12 months ended April.

That marks a slower rise than the prior month’s and suggests that inflation may be abating.

The tech-heavy Nasdaq Composite rose 3.33% on Friday amid the report’s release. It’s rebound seems to be rubbing off on its Australian counterpart.

Right now, the Novonix share price is the index’s second best performer. The tech sector is being led by the Block Inc (ASX: SQ2) share price’s 10.2% gain.

However, today’s gains haven’t been enough to boost Novonix’s stock back into the long term green.

It is still 61% lower than it was at the start of 2022. Though, it’s still 75% higher than it was this time last year.

The post Why is the Novonix share price leaping 10% on Monday? appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 shares off to a cracking start to the week
• These were the worst performing ASX 200 shares last week
• ASX 200 midday update: Appen crashes, lithum shares jump
• Novonix share price surges higher despite billionaire’s board exit
• Novonix up 15% on Friday as the market recovers

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s no secret that investing in great companies is a powerful tool for building wealth. Over the years, it has generated trillions of dollars in returns for investors of all ages. However, there is one group of investors that is often overlooked by the establishment: young people. Even today, some brokers and financial advisors see young investors as naive and inexperienced.

Being relatively fresh behind the ears itself, the Australian investing platform Stake is empathetic on the dismissal of the next generation. Though, it believes the cohort is too important to ignore, and here’s why…

Young investors are learning the ropes

The lay of the financial land in recent years has prompted young people to take charge. Measly interest accrued on savings and the elusive property market has widdled away a new generation’s options for financial freedom.

In response, hundreds of thousands of fresh new faces have arrived in the Aussie share market over the last two years. Comments concerning the next generation of investors were made during a discussion held at the Stockbrokers and Investment Advisers Association last week.

[T]hey might be naive and uneducated at the moment, and [there’s] lots of choice and multiple platforms at the moment. But they will become sophisticated at one stage and that’s where it’s our role to step up and educate them and take them on the journey.

Candice Bourke, Shaw & Partners

However, Stake chief marketing office Bryan Wilmot rebutted, stating that young investors are taking education into their own hands.

What we should be doing is encouraging more people to take control of their financial security and financial future and not just dismissing them. They’re genuinely curious people, and they’re genuinely educating themselves and I think that’s a fantastic thing.

Though, Bourke highlighted that the demographic will become an increasingly important one. A $3.5 trillion passing on of wealth will take place between baby boomers and young investors over the next decade.

Breaking stereotypes

While the proliferation of ‘meme’ stocks, including Gamestop last year, portrayed the next generation of investors as nonsensical speculators, there is data that suggests otherwise.

According to Betashares assistant portfolio manager Jessica Leung, young investors applied sound portfolio construction. To demonstrate this, Leung notes the broad-based Betashares NASDAQ 100 ETF (ASX: NDQ) and the Betashares Australia 200 ETF (ASX: A200) as two cornerstone investments.

The post Three trillion reasons why young investors need to be taken seriously appeared first on The Motley Fool Australia.

More reading

• 3 high quality ETFs for ASX investors to buy now
• Here’s why the Betashares Nasdaq 100 ETF (NDQ) is sinking today
• Are these 2 sold-off ASX growth shares now cheap bargains?
• 2 high quality ETFs for ASX investors to buy after the market meltdown
• VAS: Were you better off buying the Nasdaq ETF?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are a small number of S&P/ASX All Ordinaries (ASX: XAO) shares hitting 52-week highs today.

It’s generally a positive day for the ASX. The All Ords is currently up by 1.22%.

Early in trading this morning, there were big gains for some ASX shares. Let’s look at two that hit 52-week highs.

Bubs Australia Ltd (ASX: BUB)

Bubs is one of the largest Australian infant formula producers. And now it’s a lot bigger. The Bubs share price started Monday up by 77%, hitting a new 52-week high, after the company announced news from the United States. It has since retreated, but is still up by more than 40%.

The ASX All Ordinaries share announced that it has received US Food and Drug Administration (FDA) discretion to import Bubs infant formula. The FDA will allow the immediate import, sale and distribution of all six Bubs infant formula products into the USA under its recently-announced infant formula policy.

Bubs has committed to the Biden Administration to provide at least 1.25 million tins in the coming weeks and months.

The company said that it was one of the first to respond to the discretion policy. The policy aims to address the current infant formula shortage in the US by enabling increased flexibility for the importation of infant formula.

Bubs says that its complete range of infant formula meets the nutrient requirements of the US for an iron-fortified infant formula.

The ASX All Ordinaries shares said that 500,000 tins are ready for immediate export to the United States. The remaining 750,000 tins are planned for production and scheduled for delivery in the coming months.

The company will be able to leverage the retail distribution footprint that it has already established in the US with major e-commerce and bricks and mortar retailers.

Allkem Ltd (ASX: AKE)

The Allkem share price was another to hit a 52-week high earlier today, after rising above $14.30. However, it has since fallen back to below $13.80.

Allkem is one of the largest lithium miners on the ASX and it hasn’t announced any market-sensitive news today. The last news the All Ordinaries ASX share released to the market was its quarterly update for the three months to 31 March 2022.

In the update, the company noted its Mt Cattlin operation produced 48,562 dry metric tonnes (dmt) of spodumene concentrate. Further to this, it shipped 66,011 tonnes. It generated US$143.8 million of revenue. This was a record, with a gross cash margin of 84%, based on average pricing of US$2,178 per dmt.

Allkem also said that the Olaroz lithium facility produced 2,972 tonnes of lithium carbonate with sales of 3,157 tonnes. This generated record revenue of around US$86 million with a gross cash margin of 86%, based on average pricing of US$27,236 per tonne. The lithium carbonate price for the fourth quarter was expected to be approximately US$35,000 per tonne.

We can only speculate as to what motivated investors to drive up the Allkem share price this morning. However, the market did learn today that Tesla and Liontown Resources Limited (ASX: LTR) announced an offtake extension. Perhaps this good news had a knock-on effect for Allkem and its lithium peers.

The post 2 ASX All Ordinaries shares rocking new 52-week highs today appeared first on The Motley Fool Australia.

More reading

• Why Alkane Resources, Block, Bubs, and Telix shares are storming higher
• Why is the A2 Milk share price climbing 11% on Monday?
• Bubs share price rockets 77% on US deal with Biden Administration
• 3 ASX lithium shares set to roar back: experts
• These were the best performing ASX 200 shares last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is enjoying a second consecutive day in the green on Monday with the help of these shares.

Right now, the index is recording a 1.26% gain, led by the tech sector. The S&P/ASX 200 Information Technology Index (ASX: XIJ) is up 4.06% right now.

But which stocks ASX 200 are truly outperforming today? Let’s take a look.

3 ASX 200 shares leaping higher on Monday

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is up 9.49% to trade at $4.73 at the time of writing after reaching an intraday high of $4.85. That’s despite no news coming from the company.

In fact, the last peep of price-sensitive news issued by the ASX 200 share was released in February.  

However, there is one event that could go some way to explaining the stock’s gains today.

Its ASX-listed peer Bubs Australia Ltd (ASX: BUB) has penned an agreement with the United States government to provide 1.25 million tins of baby formula in an effort to abate a shortage.

The news may have bolstered hopes of higher demand for A2 Milk’s baby formula products.

Block Inc (ASX: SQ2)

Shares in ASX 200 tech giant Block are also taking off on Monday. Right now, they’re swapping hands for $128.25, 9.52% more than they were at the end of Friday’s session.

Like A2 Milk, there’s been no word from the company to explain the surge. However, the tech-heavy Nasdaq Composite gained 3.33% on Friday amid news inflation in the United States appears to have steadied.

Additionally, the company’s New York listing – Block Inc (NYSE: SQ) – gained 8.52% on Friday.

Novonix Ltd (ASX: NVX)

The final ASX 200 share to be launching upwards on Monday is Novonix. Its share price has lifted 9.65% today to trade at $4.09 at the time of writing.

Once again, there’s no clear reason behind the company’s gains. However, it did tumble 9.25% last week as the company announced a major change to its board.

Additionally, the battery technology and materials share is part of the ASX 200 tech index. In fact, it’s the sector’s best performer today.

The post 3 ASX 200 shares off to a cracking start to the week appeared first on The Motley Fool Australia.

More reading

• Why Alkane Resources, Block, Bubs, and Telix shares are storming higher
• ASX 200 midday update: AGL demerger scrapped, A2 Milk jumps
• Why is the A2 Milk share price climbing 11% on Monday?
• Why is the Block share price surging 8% higher today?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 1.3% to 7,274.2 points.

Four ASX shares that have failed to follow the market’s lead are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 3% to $6.34. Investors have been selling this struggling artificial intelligence data services company’s shares since the collapse of a takeover approach last week. With that deal now off the table, investors have been focusing on the company’s trading update, which was very disappointing. Appen expects its earnings to be materially lower during the first half.

Elders Ltd (ASX: ELD)

The Elders share price is down 2.5% to $13.22. This decline has been driven by the agribusiness company’s shares trading ex-dividend this morning. Eligible shareholders can now look forward to receiving its 28 cents per share partially franked interim dividend next month on 17 June.

Predictive Discovery Ltd (ASX: PDI)

The Predictive Discovery share price is down 2.5% to 19.5 cents. This morning the gold explorer announced that it has received firm commitments for a $55 million placement. These funds will be raised at 18 cents per new share, which represents a 10% discount to its last close price. The proceeds will be used partially to grow the 3.65 million ounce inferred resource at the Bankan Gold Project in Guinea, West Africa.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal share price is down 7% to $5.67. This morning Yancoal revealed that a majority shareholder launched a takeover approach. However, the proposal is a 16.6% discount to its last close price rather than a premium. The shareholder, China’s state-owned Yankuang Energy, is seeking to acquire the shares it doesn’t already own and will then delist the company. Given the size of its holding, it will only need to convince a few other major shareholders to get the deal over the line.

The post Why Appen, Elders, Predictive Discovery, and Yancoal shares are dropping appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: AGL demerger scrapped, A2 Milk jumps
• Why is the Elders share price in reverse today?
• Why these ASX coal shares could be ‘bigger than Ben-Hur’: fundie
• Here’s why the Yancoal share price is crashing 15% lower today
• These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd. The Motley Fool Australia has recommended Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price has tumbled in the past month.

Since the start of May, the gold miner’s shares have dropped around 10%, making the company one of the worst performers across the sector.

By comparison, the share price of fellow miner Newcrest Mining Ltd (ASX: NCM) declined by 7% across the same timeframe.

At the time of writing, Northern Star shares are recovering some of their losses, up 2.87% to $8.97.

What’s happened to the Northern Star share price?

The deteriorating price of gold has weakened investor sentiment, sparking a selloff of Northern Star shares.

The precious yellow metal has failed to keep up in recent times despite the turmoil impacting global markets. During times of uncertainty and volatility, gold is traditionally seen as a safe haven for investors.

However, the spot price of gold has travelled lower to trade under US$1,860 per ounce. It was only for a brief moment in early May that the gold price neared the US$1,900 mark.

China is a key market for gold purchases, particularly for use in jewellery.

Previously, the Asian giant was under tough COVID-19 restrictions which led to stores being closed in major districts.

This severely weakened demand for gold as consumers’ spending habits were disrupted.

Low demand in key markets such as China or India can drag down the price of gold.

Jewellery accounts for the largest slice of global gold demand at around 50%. This is followed by central bank reserves at 25%, individuals at 15%, and industrial uses at 10%.

In addition, with interest rates lifting, this has also driven investors away from the yellow metal.

There is a correlation here as when interest rates are low, it reduces the opportunity cost of holding non-yielding bullion.

On the other hand, when interest rates rise, investors begin to shift from gold to bonds.

What do the brokers think?

A couple of brokers believe the Northern Star share price is currently trading at a bargain price.

Last week, UBS slashed its outlook on Northern Star shares by a marginal 0.8% to $11.70 per share. Based on the current share price, this implies an upside of 31% for investors.

While the broker reduced its assessment on Northern Star, it still sees value in the gold miner.

On the other hand, Credit Suisse raised its outlook on the company’s shares by 4.5% to $11.50. Its analysts believe Northern Star shares still have some room to bounce higher.

The post Why has the Northern Star share price fallen 10% in a month appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• What’s the outlook for ASX 200 gold shares in June?
• Why I think these 3 ASX shares are top-quality buying at today’s prices
• Why are ASX gold shares leaping today?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Santos Ltd (ASX: STO) share price is having a rough start to the week despite oil prices rising.

While there’s no obvious reason behind the ASX 200 oil and gas producer’s slip, its stock might be being weighed down by its home sector on Monday.

At the time of writing, the Santos share price is $8.18, 0.79% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has lifted 0.87% today.

Let’s look closer at what might be going on with the energy stock on Monday.

Santos share price dips on Monday

The Santos share price is slipping despite oil prices reaching a two-month high on Friday.

And in what’s likely good news for ASX energy fans, demand for the commodity is expected to continue, according to CommSec.

The price of Brent crude oil rose 1.7% to US$119.43 a barrel on Friday. Meanwhile, the US Nymex crude oil price lifted 0.9% to US$115.07 per barrel.

Despite the rising price of the black liquid, both the Santos share price and the S&P/ASX 200 Energy Index (ASX: XEJ) are slumping today. In fact, the index is one of only two trading in the red at the time of writing.

The energy sector is currently down 0.31%, with Santos coming in as its fifth biggest weight.

The stock is outperforming that of Viva Energy Group Ltd (ASX: VEA), Whitehaven Coal Ltd (ASX: WHC), Ampol Ltd (ASX: ALD), and Beach Energy Ltd (ASX: BPT).

Fortunately, the Santos share price has a long way to fall before it hits the long-term red.

It has gained nearly 24% since the start of 2022. It’s also nearly 21% higher than it was this time last year.

The post Why is the Santos share price sliding on Monday? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Broker names 2 of the best ASX resources shares to buy now
• Here are the 3 most traded ASX 200 shares on Friday
• TGIF: Here’s why ASX 200 energy shares are outperforming today
• Australia’s renewable energy output could triple by 2030 under Labor. Will that impact these ASX 200 shares?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon‘s (NASDAQ: AMZN) much-anticipated stock split will take place on June 3. Shareholders approved the 20-for-1 stock split at the company’s annual meeting on May 25. 

If you’re wondering how Amazon’s stock split will impact your portfolio, below is a crash course on how stock splits work.

Behind the scenes of Amazon’s upcoming stock split 

Stock splits have been taking over headlines in 2022. In March, Amazon joined the tech gang by announcing that its 20-for-1 stock split was approved by the board of directors. The stock shot up after the news, but shares of the tech behemoth tumbled to their 52-week low a few days before the company’s 2022 annual shareholders’ meeting. 

Amazon’s stock has experienced a few bumps and bruises, but it won’t impact the stock split. Shareholders gave Amazon the green light to move forward with a stock split at the annual shareholder meeting. All shareholders on record as of May 27 will see 19 additional shares of stock for every one share they own on the big day. If you have two whole shares of Amazon stock in your account by the deadline, you’ll receive 38 additional shares after the stock split. 

The stock split will take place on June 3, and the price per share will reflect the split on June 6. This will make it easier for smaller investors to buy shares of Amazon at an affordable price. 

Stock splits won’t make you rich overnight

Although stock splits tend to stir up excitement among investors, it’s not as glamorous as it sounds. A stock split in itself won’t make you rich overnight. It’s more of a cosmetic transformation. Every share of stock will be divided into smaller pieces. This gives more people a chance to own whole shares of the stock at a cheaper price.

You can think of a stock split like exchanging a $20 bill for 20 singles. Although you have more dollars in your hand, the value of the money in your possession is still the same.

The stock split will allow investors to buy whole shares of Amazon at a cheaper price. After Amazon’s stock split, the four-figure stock price will drop to $115 if the stock is trading at $2,300 before the stock split.

The future of Amazon’s share price

It isn’t uncommon for a company’s stock price to explode after a stock split. However, you can’t guarantee that Amazon’s stock price will shoot up after the split. 

The best move you can make is to invest in companies based on the underlying business. Go behind the scenes and evaluate the business by asking the following questions:

• Is the company’s revenue sustainable? 
• What factors are driving revenue? 
• Are there any threats or weaknesses that can interfere with future growth? 

By answering these questions, you’ll be forced to do your research and determine if the company is a good fit for your goals and risk tolerance. A stock split may be a motivator to jump in, but it won’t be enough to drive the performance of a company over the long term. 

Selling Amazon stock after the split

If you decide you don’t want to hang on to your extra shares after the stock split, you might have to pay taxes. It depends on how long you’ve held the stock and your taxable income for the year.

For example, if you bought shares of Amazon after the stock split announcement and sold your extra shares after the stock split, you’ll be on the hook for short-term capital gain taxes. This is what happens when you sell stock that you’ve held for a year or less.  

However, if you don’t touch your extra shares of stock in your account, you don’t have to worry about taxes. A stock split is not considered a taxable event for investors. 

Don’t be fooled by stock splits 

This year’s stock split hype may tempt you to load up on shares of company stock that weren’t even on your radar. A stock split in itself shouldn’t be the main reason you buy a stock. You may see a temporary boost in the stock price after the split announcement, but it’s not enough to keep investors calm in this volatile market. 

That’s not to say you can’t get excited when a stock split is coming up. If you see long-term value in a company, there’s no shame in celebrating your extra shares received from a stock split. It may be the boost you need to reach your share count goal and execute other strategies in your account that can take you to the next level on your investing journey. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon shareholders approve 20-for-1 stock split. Here’s what investors should know appeared first on The Motley Fool Australia.

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• 3 reasons to buy Amazon and 1 reason to hesitate
• 2 reasons Amazon stock is slumping today
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Charlene Rhinehart, CPA has positions in Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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