March 11, 2022 · less than 3 min read
Amazon’s board approved a 20 for one stock split – meaning buying Amazon’s stock just got a whole lot easier for retail investors.
Splitting the stock
A few decades ago, splitting stock in the Amazon might’ve meant chopping wood in the forest. But let’s not get sidetracked. In a move to make its shares cheaper, Bezos’ biz has split its stock for the first time since 1999. The tech giant’s shares ended Wednesday trading at $2785 per share, but when the split goes through in June, it’ll be trading at $139.
But if you’re already holding Amazon stock, don’t panic. In fact, you can rejoice – you’ll be holding 20 times the stock you were originally.
Why do companies split their stock?
Companies will normally split their stock to make it more affordable. Big tech firms like Amazon are a shoo-in for anyone looking to build some cash, but because of this, the price of their shares can get alarmingly big – and fast.
A split makes these shares much more affordable so new investors can still afford it, and judging by Amazon’s 8% rise in share price since the announcement, it’s good news all round.
Amazon isn’t the first larger than life company to do the split. Tesla and Apple played their hand in 2020, despite Apple’s last split coming only six years before.
And for the unconvinced, there’s also the small matter of a $10 billion repurchase program – just to sweeten the deal. So, maybe now is the time to read up on stocks and shares.
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