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· Posted on
February 21, 2024

Amazon announces a 20-for-1 stock split

It's the company's first stock split since the dot-com boom in 1999.

What's the key learning?

  • Amazon is launching a $10 billion share buy-back as well as a 20-for-1 stock split. Its first stock split since 1999
  • A stock split is when a company's board of directors decides to divide an existing share into multiple shares
  • This doesn't fundamentally change anything about the company, and generally shareholders don't lose out.

Background: Amazon has been through a few changes lately. The Big Bad Bezos stepped down as CEO... its stock price ain't doing too well... and it's back-peddling from its bricks-and-mortar strategy.

 

What happened: Now, Amazon is launching a $10 billion share buy-back as well as a 20-for-1 stock split. Its first stock split since 1999.

 

What else: Amazon is trying to turn things around and instil some fresh confidence in shareholders. It kinda worked, too. The company's shares went up around 6% on the news.

 

🔔 What's the key learning?

 

💡A stock split is when a company's board of directors decides to divide an existing share into multiple shares. 

 

💡But this doesn't fundamentally change anything about the company. Put simply, rather than each share being worth $100, a 20-for-1 stock split will create 20 shares at $5 each.

 

💡But generally, it's a good thing in the long run because it makes the stock more accessible to new investors. 

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