Technology

Amazon announces 20-for-1 stock split, $10 billion buyback

Andy Jassy, chief executive officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, U.S., on Tuesday, Oct. 5, 2021.
David Ryder | Bloomberg | Getty Images

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.

This is breaking news. Please check back for updates.

Articles You May Like

All Teslas in the US get a one month trial of FSD starting this week
Everything we know about the Baltimore bridge collapse
‘Historic moment’ as two Russian ships destroyed by Ukraine
Thames Water directors hold crunch talks over utility’s future
Gogglebox and Celebrity Big Brother star dies aged 40