Companies including Amazon.com Inc. and Alphabet Inc. announced stock splits early this year as indexes hovered near record highs.

Companies including Amazon.com Inc. and Alphabet Inc. announced stock splits early this year as indexes hovered near record highs.

With the announcement of the 20-for-1 split on Monday, Amazon's stock has plummeted

in a broad market sell off that's been especially painful for the technology industry. 

While shares of the e-commerce giant rose 2% after the split, they are still down about 10% since reporting the plan in March.

While shares of the e-commerce giant rose 2% after the split, they are still down about 10% since reporting the plan in March.

 Alphabet, which announced a similar proposal in February, is down 17% since then. 

Consequently, the stocks will trade at a discount to the original executive price. By doing so, it will be easier for 

the behemoths to gain entry into the Dow Jones Industrial Average, whose weighting is determined by share price

But it might also make them appear less princely than their massive market values and history of big gains would suggest.

“Stock splits are usually a sign of optimism,” said Mark Lehmann, chief executive officer of JMP Group. 

“Very few companies split their stock in anticipation of things going badly. It’s a reflection of the entire market.”

Of course, splits have no fundamental impact on share value -- it's like exchanging a $20 bill for two $10 bills. 

But in the frenzied market of early 2022, they triggered bidding wars between traders. 

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