Amazon unveiled plans for a 20-for-1 share split last night alongside a $10bn buyback programme as it looks to re energise its flagging share price.
Existing investors are set to receive 20 shares for every share they own, driving down the price per share and widening access to new investors, which sent shares soaring over six per cent in extended trading yesterday.
The move to break up the stock marks the first since 1999 amid the ‘dot com boom’, and will drive down the firm’s price per share to $139.28 from $2,785.58, based on Wednesday’s closing price.
Shares in the firm have taken a battering in 2022 so far, falling over 14 per cent in the month leading up to yesterday’s rebound amid a wider slide in tech stocks.
Amazon shareholders will now vote on the proposal at the firm’s annual general meeting in May, with trading on the new split basis set to begin on June 6 if the move gets the go-ahead.
Bosses said the move to break up the stock will open up the firm to new investors and allow greater equity control.
“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 in a statement.
Analysts at Hargreaves Lansdown said the move spoke volumes about how the world of trading had changed.
“While such a move doesn’t mean too much for existing shareholders, it makes individual shares more accessible to everyday investors,” said Sophie Lund-yates, equity analyst at Hargreaves.
“The existential rise of low and zero-fee trading apps means stock-splits are more important than they have been for a while.”
The move from Amazon follows a similar move from Google parent company Alphabet which announced in February it would be pushing ahead a 20 to one share split, while Apple and Tesla have both made similar moves in the last two years.