This marks Amazon’s first stock split since 1999 and its fourth since its IPO in 1997. The split will give investors 19 additional shares for every share they hold. The company’s stock, which closed at $2,785.58 on Wednesday, has almost doubled over the last 2 years, as demand for e-commerce and cloud computing business surged due to the pandemic. Amazon’s shares are up more than 4,300% since the last split was announced.
According to an Amazon spokesperson, the split will give the company’s employees more flexibility in how they manage their equity in Amazon, as well as make the price more accessible to people who are looking to invest in the company.
The split will undergo shareholders’ approval in May, and if it passes, the split will go into effect on June 6.
Amazon’s move can also be aimed at getting included in the Dow Jones Industrial Average, which tends to include less expensive stocks. Amazon’s split is no guarantee that the company will be included in the index, but the Dow may want the world’s most valuable retailer and a major cloud provider, as well as a media giant.
As far as the $10 billion buyback program is concerned, it replaces the previous $5 billion stock repurchase authorized by the company’s board in 2016. Under it, Amazon had repurchased $2.12 billion in shares.
At the moment of writing, Amazon’s stock price was trading 4.72% higher.
Sources: cnn.com, reuters.com
