Last night, Amazon announced a stock split for the first time since 1999, and the fourth time since listing in 1997. This marks the end of an era of four-digit stock prices for the e-commerce juggernaut, joining other big tech companies like Tesla, Alphabet and Apple who recently turned to stock splits to attract more retail investors.
Current Amazon shareholders will end up with 20 shares for each one they currently own, so a 20-for-1 ratio. The share price will go from around $3 000 now to around $150 in future. The value of your portfolio holding will stay the same.
Stock splits don't really change anything at all. They do help retail investors with less cash to invest, and will also afford Amazon employees more flexibility in the management of their equity bonuses and other incentives.
On top of that news last night, Amazon also announced a new $10 billion share buyback, to take advantage of the recent share price pullback.