From the first time, the shares of Amazon has risen above $1000 per share on Tuesday, during which Alphabet- Google parent company has reached around $997 per share. The share price of Alphabet is expected to cross $1000 cost per share very soon. As a result, Amazon and Alphabet have been on a rip and rising around 39% and 23% respectively from the start of 2017. This is projected to create promising opportunities and high profits for companies and investors in the near future.
High Stock Price Not Sole Factor to Determine Company Value
It is considered as a moment of pride to have a high-flying stock price not only for a publicly traded company but also for its investors. However, the cost of a single unit of stock actually matters very little. This is due to the cost of each share completely depends not only on the company value, but also on the number of shares that have been made available for investors. For instance, if Amazon and Apple, which are among the most popular companies, are expected to be compared, then Amazon will surely appear to be more valuable as the share price is quite higher. However, a company’s share price is not the only factor which determines the value as it depends on the number of outstanding shares.
High Price of Stock May Result in Split of Shares
As per the previous records, when the stock price of a company reaches too high, then the firm have split their stock in order to make it easier for the investors to make a purchase. This split is actually same in terms of value for the pocket, the only difference is the investors now have high number of shares. Thus, high units of stock are expected to result in higher costs for the investors in the near future.