US Stocks

Amazon shares rise 7% premarket on 20-for-1 stock split

Amazon announces $10 bln share buyback.

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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Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.