Amazon’s (AMZN) stock rose 2% immediately after it began trading on a 20-for-1 split adjusted
basis.
The stock split brought the e-commerce giant’s share price down to $122.35 U.S., the lowest
level it has been in 12 years. Last week, Amazon stock was trading at more than $2,000 U.S.
per share. It had been as high as $3,773.08 U.S. a share a year ago, putting them out of reach
for many individual investors.
But following the split, investors can now buy the stock for less than $125 U.S. The last time
Amazon’s share price was this low was in 2010 coming out of the 2008-09 financial crisis.
Amazon announced on March 9 of this year that its board of directors had approved a 20-for-1
stock split and that the shares would begin trading on a split adjusted basis June 6. News of the
split was greeted enthusiastically by investors and analysts, many of whom had been lobbying
for years for the Seattle-based online retailer to lower its share price through a split.
This is the fourth time in Amazon’s history that the company has split its stock. The last time
Amazon’s stock split was in September 1999, when it split on a 2-for-1 basis. The company’s
stock also split on a 2-for-1 basis in June 1998, and on a 3-for-1 basis in January 1999.
Amazon’s share price had risen more than 4,000% since its last stock split more than 20 years
ago just before the dot.com bubble burst. The company held its initial public offering (IPO) in
1997, when Amazon’s stock began trading at $1.73 U.S. per share.
Google parent company Alphabet (GOOGL) also announced a 20-for-1 stock split effective on
July 15 this year. It will be the first time Alphabet will split its stock since 2014 when it split on a
2-for-1 basis.
Prior to the stock split, Amazon’s stock had fallen nearly 30% year to date. The company’s
shares finished trading yesterday (June 6) at $124.79 U.S., up 2% on the day.
