Don’t worry! Amazon.com Inc shares aren’t down 95 percent on Monday. The e-commerce giant has split its stock for the first time in more than 20 years.
What to Know
Amazon announced a 20-for-1 stock split in March. Shareholders of record on May 27 were eligible to receive 19 additional shares for every one share held on June 3. Amazon began trading on a split-adjusted basis today.
Stock splits don’t actually change anything fundamental about the company enacting the split, yet a cheaper share price can make the stock more accessible to a larger number of investors.
In Amazon’s case, it’s possible the stock split could increase access for some of the company’s everyday customers, as well as make the stock eligible for a potential Dow Jones inclusion.
Why It Matters
Amazon joins a growing group of popular tech companies to announce splits in recent years. Alphabet Inc announced a 20-for-1 split just a few weeks before Amazon. In 2020, Apple Inc put forth a 4-for-1 split and Tesla gave investors 4 additional shares for each one share held as part of a 5-for-1 split.
Both Apple and Tesla fared well after announcing stock splits. Amazon has traded lower since its split was announced and remains down more than 25 percent year-to-date.
By Adam Eckert
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