Amazon Stock Rises on Announcement of Planned 20-for-1 Split - The Jewish Voice
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Monday, July 4, 2022

Amazon Stock Rises on Announcement of Planned 20-for-1 Split

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For anyone who ever wanted to own shares of the online mega- retailer Amazon, your time has finally arrived. According to published reports on various business web sites, shares are about to get 20 times less expensive. As we can imagine, such news has thrilled investors who are just hankering to dive right into this newfound opportunity.

CNN reported that on Wednesday, Amazon announced that its board of directors approved a 20-for-1 stock split, its first split since 1999. If approved by shareholders in May, the split will go into effect June 6.

Yahoo Finance reported that on Thursday, Shares of the e-commerce giant soared 7% in pre-market trading on the heels of the announcement. The company also uncorked a massive $10 billion stock buyback plan.

Speaking to Yahoo Finance, Dan Ives, Wedbush tech analyst said: “Big tech stalwarts all saw massive strength during the pandemic and the stocks are now ripe for a split. Amazon is following the lead of Apple, Tesla, and Alphabet on the stock split path. These are smart moves as investors positively digest stock splits. We believe tech names are oversold as we seen in five years.”

In 2020, both Apple and Tesla announced stock splits.

CNN reported that for all those out there who already own stock in Amazon, “your stakes will still be worth the same. You’ll be holding 20 times more shares when all is said and done.”

Yahoo Finance also reported that Bank of America tech analyst Justin Post said in a note: “We continue to rate Amazon as our top FANG and large-cap internet stock for 2022 “Amazon’s profit outlook is improving as the COVID impact on labor and supply chain subsidies.”

For those who lack familiarity with the nature of stock splits or the ups and downs of the stock market, CNN reported that, “companies split their stocks for numerous reasons: Splits can put their stock within the reach of smaller, individual investors. It helps companies gain liquidity and splits can create more demand for a company’s stock.”

In a statement, Amazon said: “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.”

Yahoo Finance reported that “Amazon shares are down about 9% in the past year, compared to a 7% gain for the S&P 500. The stock is the second worst performer in the FAANG [Meta (formerly Facebook), Amazon, Apple, Netflix, Google] complex in the last 12 months, with Netflix leading the way lower at a 32% drop.”

The one stock that has an exceptionally high stock price but has never split is Berkshire Hathaway. CNN reported that at $488,245 a share, Berkshire shares are unapproachable for most individual investors. That’s why it offers its B-class shares, which have split in the past, for $325.






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