Amazon announces 20-for-1 stock split and $10 billion share buyback program

[Shawn Knight]

Recap: This will be Amazon’s fourth stock split since going public in 1997, and its largest by far. The first took place in June 1998 on a 2-for-1 basis, followed by a 3-for-1 split in January 1999. The last split also came in the dot-com era, a 2-for-1 split in September 1999.

Amazon in a recent filing with the Securities and Exchange Commission (SEC) said its board of directors has approved a 20-for-1 stock split.

The proposal is subject to shareholder approval at the company’s upcoming annual shareholder meeting slated for May 25, 2022. Should everything go according to plan, the split will occur in early June with trading on a split-adjusted basis expected to begin on June 6, 2022.

An Amazon spokesperson told CNBC the split would give employees more flexibility in how they manage their equity in the company and make the share price more accessible to those interested in investing in Amazon.

Amazon is the latest in a line of big tech companies attempting to make their stock more accessible to mainstream investors. Alphabet last month announced a 20-for-1 split that’s set to go into effect this summer. Nvidia completed its 4-for-1 split last July. Apple and Tesla split their stocks in August 2020, on a 4-for-1 and 5-for-1 basis, respectively.

Amazon's board also authorized the company to repurchase up to $10 billion of its common stock, which it believes will enhance long-term shareholder value.

Image credit energepic

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https://www.techspot.com/news/93730-amazon-announces-20-1-stock-split-10-billion.html

 

[QuantumPhysics]

I participated in Apple's, Nvidia, Google and I will participate in Amazon's.

 

[scavengerspc]

I am sure as hell not a stock's expert (I barely qualify as an enthusiast) but I would have thought it was illegal to dilute your own stock. I don't even know why I thought that.

 

[terzaerian]

I am sure as hell not a stock's expert (I barely qualify as an enthusiast) but I would have thought it was illegal to dilute your own stock. I don't even know why I thought that.

The market cap remains the same, the number of shares is just increased while per-share price decreases.

All current shareholders receive a proportional number of shares after the split; e.g. anyone that had five shares of Amazon will have 100 after the split, worth the same amount as their original five did.

It's all to make the per-stock cost more granular to get more investors to bite.

 

[scavengerspc]

The market cap remains the same, the number of shares is just increased while per-share price decreases.

All current shareholders receive a proportional number of shares after the split; e.g. anyone that had five shares of Amazon will have 100 after the split, worth the same amount as their original five did.

It's all to make the per-stock cost more granular to get more investors to bite.

Damn, you made that simple enough. Thanks.

 

[umbala]

I participated in Apple's, Nvidia, Google and I will participate in Amazon's.

Oh yeah, all the big stock holders are the random dudes on random tech sites who are always the first to reply to every single post (read: waaay too much free time on your hands). I'm sure you have stock in every major tech company on the planet!

 

[Uncle Al]

FINALLY .... a company "gets it". Lots and lots of small time investors have been waiting for this and as stated earlier, it will be a real boom for the investing markets and any company that also goes this route ....