Amazon Reveals a 20-for-1 Stock Split and $10M Buyback

E-commerce Amazon was shaking things up in the market today with its announcement that its board of directors has approved a 20-for-1 stock split.

It’s the first split since 1999 for the company and the fourth since Amazon’s IPO in 1997. Investors will receive 20 shares for each share they currently own.

The company additionally said its board has authorized Amazon to buy back up to $10 billion worth of shares.

The stock soared 6% in extended trading on Wednesday as Wall Street cheered the news.

Jefferies’ Brent Thill says Amazon stock split is a good outcome for investors moving forward

Shares of Amazon have dropped 16% so far in 2022, joining a decline across the tech sector. The company also just reported its slowest rate of growth for any quarter since 2001 and, according to a recent Wall Street Journal report, billionaire activist investor Dan Loeb, who’s been adding to his Amazon holdings, told investors on a private call that he sees about $1 trillion in untapped value at the company.

Amazon, which has recently made adjustments to its compensation strategy, said the latest change is targeted at helping corporate staffers.

“This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company,” an Amazon spokesperson said.

Earlier this year the company increased its maximum base salary for corporate workers to $350,000, up from $160,000, as it contends with an increasingly competitive labor market.

Distributions from the stock split will be made to Amazon shareholders at the close of business on June 3, and trading will begin on a split-adjusted basis on June 6.

Amazon shares are up more than 4,300% since the last split was announced.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.