What does Amazon’s stock split mean for investors

What happened?

Amazon shareholders have approved a 20-for-1 stock split. What this means is that if you own one Amazon share, you will receive 19 additional shares. 

Trading of the stock on a split-adjusted basis is expected to begin on 6 June (Monday). 

Based on the stock’s closing price on 3 June, the stock would be priced at $122.35 after adjusting for the stock split.

What does this mean?

While stock splits do not change the fundamentals of a company, past instances have shown that they can provide a boost to share prices. 

Tesla, Apple and Nvidia’s previous stock splits would be good examples. 

This might be due to more individual investors being able to buy the stock as the absolute price per share is brought down. 

This is reflected in Amazon’s share price in recent days. Amazon was up close to 6% in the past week, doing much better than the Nasdaq which saw losses of 1%.

Why should we care?

If you have missed out on Amazon’s stock split, be sure to keep a lookout for upcoming stock splits by other tech giants.

Alphabet’s stock split is expected to be in July this year.

Tesla will be proposing a stock split at its upcoming shareholder meeting in October.