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Amazon Reveals a $10 Million Buyback and 20-for-1 Split in Common Stock

Photo: Christian Wiediger

The pandemic has made businesses rethink their entire business model. Some people might think that this is not good, but it’s actually good for e-commerce companies.

Amazon’s stock rose 7% after the company announced on Wednesday that they would be buying back $10 million worth of their own shares. The company’s board also approved a 20-for-1 split in its common stock.

It will be the first-ever split in Amazon since 1999 and will offer investors 19 more shares for each share they own. June 6 will be the start of the trading based on the new share price. 

Amazon’s move is the same as the one revealed by Alphabet Inc, Google’s parent company, a month ago. In addition, numerous giants in different industries, including Apple Inc, Tesla, and Nvidia, have made the same move as Amazon since 2020. 

The company has seen its shares rise almost twice in recent years when the market scope for its e-commerce and cloud computing services rapidly increased due to the COVID-19 pandemic.

According to an Amazon spokesperson, “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.” 

The repurchase takes the place of the former $5 billion stock buyback permitted by Amazon’s board in 2016, under which the behemoth had bought back $2.12 billion of its shares. 

Following the decline of stocks at approximately 16% due to a tech rout this year, the behemoth’s market cap thrived at $1.4 trillion as of the latest close.

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