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. Google parent Alphabet revealed in February that it intends to conduct a 20-for-1 stock split on July 15.
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.
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1. Tesla
Tesla (TSLA 12.06%) 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.
2. MercadoLibre
You won't find MercadoLibre (MELI -1.79%) 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.
3. Regeneron Pharmaceuticals
Regeneron Pharmaceuticals (REGN -0.09%) 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.
