Basketball fans know March means MARCH MADNESS! Have you completed your bracket yet? The 2022 NCAA tournament begins March 15th and to help celebrate, Dr. Astuto has created an activity to capture the excitement by having your class create its own "bracket" with companies competing to make it to the Final Four. Follow the instructions posted in Schoolnotes to play and compete against the other teams in your class for the Bonus Points prize!

The uncertainty with Ukraine and Russia along with Wednesday's anticipated interest rate hike by the Fed, continues to weigh on the markets. But in more positive news, you may be thrilled by the recent Amazon announcement - a stock split is in the works making the inclusion of the company in future SMG portfolios a bit easier. Andy Jassy, Amazon's CEO announced last week a 20-1 split, putting the company in contention to be included in the Dow Jones Industrial Average. What does this mean for Stock Market Game students? We will see in next year’s SMG session to see the effect! Distributions from the stock split will be made to shareholders at the close of business on June 3rd, and its new split-adjusted pricing will begin on June 6th.

For those new to investing, a stock split refers to a corporate action that increases (or decreases) the number of shares in a public company. A 2-for-1 stock split, for example, doubles the number of outstanding shares and divides the price by two. If you own 100 shares of a stock selling at $50 a share, for a total value of $5,000, and the company's directors authorize a 2-for-1 split, you would own 200 shares priced at $25, with the same total value of $5,000. While 2-for-1 splits are the most common, stocks can be also split 3-for-1, 10-for-1, or any other combination (20-1 in the case of Amazon). In addition, a company can reverse the process and consolidate shares to reduce their number by authorizing a reverse stock split. The effect of that would be to raise the per-share price of the stock.

You may be curious about the purpose of a stock split. It's basically an accounting procedure. Instead of a $20 bill in your wallet, you now have two $10 bills. If a stock split simply rearranges the numbers, why do companies do them? The typical reasons include: making the stock appear cheaper than it really is (to encourage more buyers), to increase liquidity, to meet stock exchange listing requirements, and to express a bullish management attitude. Amazon stated, “This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company.”

Have a great week ahead!

Best regards,

Elizabeth Reidel

National Director

SIFMA Foundation

[email protected]