Multinational technology company Amazon has announced a stock split telling investors that they’ll receive 20 shares for each share that they already own. The company also mentioned that its board had also approved a buy back of up to $10 billion worth of shares.
Following the announcement, the company’s stock soared about 6 percent in Wednesday’s extended trading.
The stock split doesn’t change anything about the company, what the stock split means is that its shares will be accessible to more investors because of the 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’s stock split follows shortly after Google announced its stock split early last month. Google announced a 20-for-1 split for its stock, shareholders would get 19 additional shares for each one they owned.
According to an Amazon spokesperson, “This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company.”
The company which recently made changes to its compensation strategy, said the latest change is targeted at helping corporate staffers. In February, Amazon boosted its maximum base salary for its corporate workers from $160,000 to $350,000 as the competition in the labour market continues to rise. These changes were made after the company’s stock underperformed in 2021. It usually relied on stock awards to attract talent prior to now.
This is Amazon’s fourth stock split since its IPO in 1997, and its first since 1999, when the company was a fraction of its current size. It also split on a 2-for-1 basis on June 2, 1998; a 3-for-1 basis on Jan. 5, 1999; and a 2-for-1 basis on Sept. 2, 1999.
The company’s shares are up over 4,300 percent since it announced its last stock split.
Shareholders will receive their share of the stock split at the close of business on the 3rd of June and on the 6th of June, trading will begin on a split-adjusted basis.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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