Seattle, MAR. 10 (U.S.): Amazon.com said Wednesday that its board of directors approved a 20-for-1 split of the e-commerce giant’s common stock and authorized a $10 billion buyback plan, sending the company’s shares up 7% in extended trading.
This is the first stock split by Amazon since 1999 and will give investors an additional 19 shares for every share they own. Trading based on the new share price will begin on June 6, according to Reuters.
Amazon’s share split is similar to that announced by Alphabet, Google’s parent company, last month. Many huge companies such as Apple, Tesla, and Nvidia have been splitting their shares since 2020.
Amazon stock, which closed at $2,785.58 on Wednesday, has nearly doubled over the past two years, as demand for both the e-commerce and cloud computing business has surged in the wake of the COVID-19 pandemic.
“This split will give our employees more flexibility in how they manage their stock in Amazon and make the stock price more affordable for people looking to invest in the company,” an Amazon spokesperson said.
The stock buyback replaces the previous $5 billion stock buyback authorized by Amazon’s board of directors in 2016, under which the company repurchased $2.12 billion of its stock.
After shares plunged about 16% amid a tech defeat this year, the company’s market capitalization reached nearly $1.4 trillion at its latest close.