Amazon.com Inc.’s shares (NASDAQ: AMZN) rose 7% in after-hours trading on Wednesday after the company announced a 20-for-1 split at the close.
The stock split will reduce the price of Amazon shares by issuing a bunch of new shares to existing shareholders, making Amazon worth exactly the same as it was previously, just with more shares worth less money.
Amazon closed Wednesday at $2,785 per share. If the stock split were to happen today, Amazon’s stock would be worth $139 a share.
Splits can put a company’s stock within reach of smaller, individual investors and can help companies gain liquidity by creating more demand for a company’s stock.
Amazon’s share split is similar to the one announced by Google parent Alphabet Inc last month. Several companies such as Apple Inc, Tesla have split their stocks since 2020.
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