Amazon announced its first stock split since the dot-com boom, telling investors on Wednesday that they’ll receive 20 shares for each share they currently own. The stock soared 6% in extended trading.
The company also said it plans to buy back up to $10 billion worth of shares.
Stock splits are cosmetic and do not fundamentally change anything about the company, other than possibly making the shares accessible to a larger number of investors because of their cheaper price.
Were the split to happen as of Wednesday’s close, the cost of each share would go from $2,785.58 to $139.28, and each existing holder would get 19 additional shares for every one they own.
Amazon joins a parade of highly-valued tech companies pulling down the price of each share through a split. Google parent Alphabet announced a 20-for-one split in February. In mid-2020, Apple disclosed plans for a four-for-one split, and Tesla told investors it was instituting a five-for-one split.
CEO Andy Jassy has faced a rough start to his tenure, which began in July. The stock was the worst performer among Big Tech companies last year and has dropped 16% so far in 2022, joining a decline across the sector. Amazon just reported its slowest rate of growth for any quarter since 2001, and according to a recent Wall Street Journal report, billionaire activist investor Dan Loeb, who’s been adding to his Amazon holdings, told investors on a private call that he sees about $1 trillion in untapped value at the company.
The shares will be distributed to Amazon shareholders at the close of business on May 27, and trading will begin on a split-adjusted basis on June 6.
— CNBC’s Ari Levy contributed to this report.
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