Amazon announces 20-for-1 stock split, $ 10 billion buyback

Andy Jassy, ​​chief executive officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, US, on Tuesday, Oct. 5, 2021.

David Ryder | Bloomberg | Getty Images

Amazon announced its first stock split since the dot-com boom, telling investors on Wednesday that they’ll receive 20 shares for each share they currently own. The stock soared 6% in extended trading.

The company also said the board authorized it to buy back up to $ 10 billion worth of shares.

Stock splits are cosmetic and do not fundamentally change anything about the company, other than possibly making the shares accessible to a larger number of investors because of their cheaper price.

Were the split to happen as of Wednesday’s close, the cost of each share would go from $ 2,785.58 to $ 139.28, and each existing holder would get 19 additional shares for every one they own.

Amazon joins a parade of highly-valued tech companies pulling down the price of each share through a split. Google parent Alphabet announced a 20-for-one split in February. In mid-2020, Apple disclosed plans for a four-for-one split, and Tesla told investors it was instituting a five-for-one split.

CEO Andy Jassy has faced a rough start to his tenure, which began in July. The stock was the worst performer among Big Tech companies last year and has dropped 16% so far in 2022, joining a decline across the sector. Amazon 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.

The move marks the latest adjustment to Amazon’s compensation package. Last month, Amazon boosted its maximum base salary for corporate workers to $ 350,000, up from $ 160,000, as it contends with an increasingly competitive labor market.

The shares will be distributed to Amazon shareholders at the close of business on June 3, and trading will begin on a split-adjusted basis on June 6.

This is Amazon’s third stock split since its IPO in 1997, and its first since 1999, when the company was a fraction of its current size. It also split on a two-for-one basis on June 2, 1998; a three-for-one basis on Jan. 5, 1999; and a two-for-one basis on Sept. 2, 1999.

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

– CNBC’s Ari Levy contributed to this report.

This is breaking news. Please check back for updates.

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