Amazon declares 20-for-1 stock partition, $10 billion buyback
Key takeaways:
- Amazon on Wednesday stated its board of directors had authorized a 20-for-1 stock split.
- It's the major split since 1999 and the fourth since Amazon's IPO in 1997.
- The firm also stated its board had approved Amazon to purchase back up to $10 billion value of shares.
Amazon's first split since 1999:
Amazon declared its first stock separation since the dot-com boom, telling investors on Wednesday that they’ll get 20 shares per share they presently own. The stock skyrocketed 6% in extended trading.
The firm also said the board-certified it to purchase back up to $10 billion worth of shares.
Stock splits are decorative and do not fundamentally alter anything regarding the firm, other than maybe making the shares available to a more significant number of investors because of their lower price.
Were the split to ensue as of Wednesday’s close, the price per share would range from $2,785.58 to $139.28, and each current holder would earn 19 additional shares for every one they own.
Amazon is the latest positively valued tech firm to pull down the cost of each share through a split.
Google parent Alphabet declared a 20-for-1 split in February. In mid-2020, Apple announced plans for a 4-for-1 split, and Tesla told investors it was forming a 5-for-1 split.
Andy Jassy, Amazon’s CEO, has met a harsh beginning to his tenure, which started in July. The stock was the worst performer among Big Tech firms the previous year and has declined 16% so far in 2022, joining a drop across the sector.
Amazon just registered its slowest pace of growth for any quarter since 2001 and, according to a recent Wall Street Journal report, billionaire activist investor Dan Loeb, who’s been counting to his Amazon holdings, informed investors on a private call that he notices around $1 trillion in untapped worth at the firm.