Amazon.com Inc AMZN made two big announcements after market close Wednesday.
What Happened: Amazon's Board of Directors authorized a 20-for-one stock split on common shares. The record date for the stock split will be the close of business on May 27, 2022. Shares are expected to trade with the adjusted price on June 6 after the market close.
Amazon also announced a share buyback of up to $10 billion.
“The program allows the company to repurchase its shares opportunistically when it believes that doing so would enhance long-term shareholder value,” the company said.
The new buyback program replaces an existing $5 billion share buyback authorization approved in 2016, in which the company had purchased $2.1 billion of its shares under the plan.
Amazon said its annual meeting of shareholders is scheduled to take place on May 25.
Why It’s Important: An Amazon stock split has been rumored due to its high price per share.
A stock split will not change the value of Amazon, but could make it easier for investors to accumulate shares of the e-commerce company and will also significantly impact the price of options on the stock.
A stock split could also lead to inclusion in the Dow Jones Industrial Average Index.
Technology giant Alphabet Inc GOOGGOOGL announced a 20-for-one stock split in early February. Other large companies like Apple Inc AAPL and Tesla Inc TSLA have also completed stock splits and seen a boost in share price after the announcement and after shares began trading with the adjusted amount.
Amazon’s last stock split was in September 1999 with a two-for-one split. The company also had a three-for-one split in January 1999 and a two-for-one split in 1998.
AMZN Price Action: Amazon shares are up 6.6% to $2,970 in after-hours trading. Shares have traded between $2,671.45 and $3,773.07 over the last 52-weeks.
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