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I am registered with numerous stock market information services. It comes with the job. Earlier this week, some of these tools sent me so many news announcements that I almost pulled my phone out of my pocket. I made an eye-opening discovery.
A buzzing flood of surprises
According to these unexpected notifications, Netflix (NASDAQ:NFLX) We just split the stock. oh? Maybe they announced it in their innovative earnings report and no one noticed? I think it can happen.
hang on – international office equipment (NYSE:IBM) I did the same thing. after that, american bank (NYSE:BAC), apple (NASDAQ:AAPL)and toyota motors (NYSE:TM), to name a few. It was impossible for all of these giant companies to perform stock splits at once, singing the Gregorian chants of Wall Street accounting tricks, without generating headlines for miles. Additionally, I couldn’t find any similar stock split announcements from my usual sources that focus on the US stock market.
So I checked the notification again, focusing on the stock price information. And that shocked me.
All of these stock splits took place on Wednesday, but no U.S. stocks were actually involved. Every announcement was about the presence of their respective companies in the world. argentinian Stock market, Buenos Aires Exchange.
Don’t cry for me, Argentina. I wish I could cry for you.
Yes, Netflix and Apple actually split their stocks this week, but not because their listing prices on the NYSE and Nasdaq exchanges became too high. Most of that may get there soon, and I wouldn’t be too surprised if Netflix did a regular installment in the near future. But Bank of America’s stock costs just $33 per share.
The situation is much different at the Buenos Aires exchange, where investors have to contend with Argentina’s staggering hyperinflation. Here, Netflix is trading at around 14,700 Argentine pesos per share after Wednesday’s 3-for-1 stock split. That’s about $18 at current exchange rates. However, things change quickly in Argentina. In early December, the same stash of pesos was worth $41. A year ago it was $79. Amid these devastating currency trends, it’s no wonder that American companies feel the need to adjust their stock prices.
The US dollar inflation rate soared to 9.1% in June 2022. This was a painful spike with game-changing effects on the country’s business and personal finances, prompting aggressive anti-inflationary policies at all levels of government.
The Argentine crisis is an order of magnitude more serious. December price was 25.5% exceeds november As is common in US inflation reports, it increased by 211% year over year.
Argentina is teaching me about the store of value.
At a time like this, you might think that the price of U.S. stocks on the Buenos Aires Exchange is a low priority. But Argentines with the wherewithal and foresight to invest in these stable value stores have a powerful financial tool in their hands. As the peso loses value, stocks, physical gold, Bitcoin (Cryptocurrency: BTC) becomes incredibly important. Other defense options include real estate holdings, automobiles, or foreign currency notes and coins, such as the dollar.
The total value of Netflix, Toyota and Apple’s shares in the Buenos Aires market is always linked to U.S. stock prices, filtered by differences in effective exchange rates and number of shares. Holding foreign stocks (and other stable assets) can help you keep food on the table when the pesos in your pocket are becoming worthless.
Reminding me of Argentina’s inflation crisis may not improve my investment strategy much, but these buzzing notifications opened my eyes to the enormity of this financial disaster. . We can see why Netflix pointed to the peso depreciation as a headwind of his 3% exchange rate to next quarter’s revenue growth. And while it seems unlikely that the situation in the US will mirror the Argentine crisis any time soon, a healthy stockpile of gold or Bitcoin could be a lifesaver if the next local inflation crisis turns out to be even worse than the recent crisis. It may be a means.
Initially a curiosity, these stock splits reveal the profound effects of changes in the global economy. They highlight a crucial truth for investors: the importance of vigilance in an interconnected world and the wisdom of diversifying beyond the traditional stock market. Stay diversified, stay alert, and keep some Bitcoin or gold on hand for a rainy day. Because when it rains the size of a national economy, it really pours.
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Bank of America is an advertising partner of The Motley Fool’s Ascent. Anders Bylund has held positions at Bitcoin, International Business Machine, and Netflix. The Motley Fool has positions in and recommends Apple, Bank of America, Bitcoin, and Netflix. The Motley Fool recommends International Business Machines. The Motley Fool has a disclosure policy.
Stock Market Curve Balls: Apple, IBM, and Netflix Just Split Their Stocks, But It’s Not What You Think Originally published by The Motley Fool
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