There is a steady realm of careful investors who look toward the top big-cap tech stocks as a conservative placement among global stocks, and therefore any slight change in their structure can lead to a depletion of confidence.
The Silicon Valley giants have dominated the top end of the American stock markets for many years now, and due to their size and market dominance in most areas of global business combined with their responsibility to shareholders and high public profile, they are often not subject to large moves.
Within these ‘FAANG’ stocks which consist of Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly known as Google), a relatively small movement in an upward or downward direction in terms of stock price is considered newsworthy.
Over the past few days, one of these stocks has been making a far more rapid downward direction than its ordinarily steady movements, and that stock is Google.
Google stock, which is traded on the tech-friendly NASDAQ exchange under its Alphabet Inc Class A listing, has been on a very noticeable downward journey for the past few days.
At close of business yesterday in New York, Google stock had declined by 0.86% compared to its opening price, however the real indicator of a bearish mood is its performance over the last five trading days, in which it has gone down in value by some 7.95%.
This decline in confidence, especially to that extent, is rare for Google, however it is likely that it has been fueled by the announcement by Google just a few weeks ago that it plans to perform a stock split.
At first, the market responded well to this announcement, and Google stock outperformed the market between the announcement taking place and close of business on April 4, however since then it has been volatile to say the least.
At the end of last week, Google stock had begun to decrease in value, and when the US market opened on Monday this week, it began to drop of noticeably.
Google’s proposed 20:1 stock split is set to take place in July 2022, and at that time, Google shareholders will receive 19 additional shares for each share held after market close on Friday, July 15th. Alphabet stock will begin trading split-adjusted on Monday, July 18th, with an estimated value of between $140 and $150 per share.
It is therefore difficult to see how the stock has declined this much when a potential windfall is on the cards, and Google’s plan is no different to the near future plans of Tesla and Amazon, both of whom are looking toward a stock split.
As it stands, Google is $2,554.29 per share which is by no means the doldrums and is still higher than this time last month when it suddenly dropped to 2,519 per share, however it recovered quickly and had been ahead of the market for around two weeks before this new drop which has been worsening over the past few days.
It is interesting to see relative volatility in this big tech stock, and where it will lead as the week progresses.