Amazon stock price: Amazon stock is trading at an adjusted price of 20 to 1

E-commerce giant Amazon is set to trade its shares with a 20-for-1 stock split. It’s the first such financial milestone for the company in the past two decades. The shares will trade at a split-adjusted price on June 6. Earlier, Amazon announced that each shareholder of the company would get 19 additional shares for each share held. These include the largest stock split in Amazon’s history.

The company’s split-adjusted share price went into effect after the close of trading on Friday, June 3. Therefore, Amazon’s closing price on June 3 will be divided by 20 to account for the increase in the number of shares before June 6. All investors who held Amazon stock on or before May 27 will be eligible to receive the benefit provided by the stock split.

According to stock market experts, the stock split may encourage new investors to invest their money in Amazon and own its shares as the company’s shares have become affordable.

A stock split lowers the price of the stock and encourages new and small investors to trade. Also, when a company exercises a stock split, it indicates the well-being of the company’s finances. This positive outlook, in turn, attracts and encourages more investors to put their money into the shares of the company.

However, the practice of stock splitting does not necessarily result in a change in the valuation and business of the company. It does not affect investors’ actions. The stock split simply lowers the cost per share, making them more accessible to investors.

Notably, Amazon isn’t the only major company to have opted for the stock split. A few weeks ago, Alphabet Inc., Google’s parent company, also executed a 20-to-1 stock split. Apple Inc also opted for a 4-to-1 stock split in 2020. Additionally, Tesla had introduced a 5 to 1 split for its investors in 2020.

Amazon shares are traded on the Nasdaq stock exchange under the symbol AMZN. Amazon also has an earlier stock split history. Amazon went public in 1997 when the IPO price was $18.00

According to Kunal Sawhney, CEO of Kalkine Group, stock splits may not bring fundamental change in the company’s business or valuation. It only lowers the unit price of a share. It becomes affordable and attracts new investors.

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Karen J. Nelson