Will Amazon stock split in 2022

Amazon’s Board approved the 20-for-1 stock split announced in March at the 2022 Annual Meeting of Shareholders on May 25. The split will enable more investors to afford to invest in Amazon, and it will broaden the company’s audience and reach.

Table of Contents Show

The stock split factor
What you could have made on AMZN
Why AMZN split shares
AMZN’s stock split terms
Should you still buy Amazon?
What the stock split says about Amazon
Bottom line
What stocks will split in 2022?
How much was Amazon stock when it split 2022?
Is Amazon a good investment for 2022?
Is Amazon gonna split?

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For example, today’s stock price for Amazon is $2,222 a share. After the stock split, investors would pay $111 per share.

“The Board anticipated that the increase in the number of outstanding shares resulting from the stock split will reset the market price of the common stock, in a range that would give our employees more flexibility in how they manage their equity in Amazon and make the common stock more accessible for anyone who wants to invest in Amazon,” the company said in a proxy filing.

Amazon said in a Securities and Exchange Commission (SEC) filing in March, that if approved, at the close of business on May 27, 2022, each shareholder will have 19 additional shares for every one share held as of such date reflected in their accounts on or about June 3, 2022. Trading is expected to begin on a split-adjusted basis on June 6, 2022, according to the SEC filing.

Amazon’ stock, which is down 34.8% year-to-date, was up 0.5% in pre-market trading on May 27.

According to Kiplinger, markets like splits as they give investors more flexibility, while bearing no impact on a company’s fundamentals or valuation.

“That’s because a split is essentially the same thing as making change. In this case, shareholders will effectively be swapping a $20 bill in return for 20 $1 bills,” according to Kiplinger.

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Another factor that might benefit Amazon, according to Wedbush Securities analyst Dan Ives, is that “the shift to the cloud is only 40% complete with a massive digital growth wave ahead that will benefit the company, along with Microsoft, Google, Salesforce and Oracle.”

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Amazon is part of a slew of companies that have recently announced stock splits. Shopify announced one in April, and meme stock darling GameStop announced on March 31 that it will request stockholder approval for a stock split at the upcoming 2022 annual meeting, according to a Securities and Exchange Commission (SEC) filing.

Other companies making similar announcements include Tesla in late March, and Amazon and Alphabet, which announced a 20-for-1 stock split in March and February respectively.

The stock split factor

On March 9, 2022, Amazon announced that its board of directors had approved the online retailer’s plan for a 20-for-1 stock split, which affected stockholders who owned shares of the online retailer at the close of business on June 6, 2022.

It was the first time the stock has split since 1999, and it has split a total of four times now, including this year’s split, since the stock had its IPO in 1997.

But what is a stock split? It’s when a company takes each of its outstanding shares owned by shareholders and splits them. That means a shareholder would have the same amount of money invested in the company but will have more shares in their portfolio.

For example, if you owned $1,000 of Amazon stock before the split, you would still own $1,000 of stock after the split as well. It’s just the number of shares that changes. With Amazon, the number of shares that you would own would increase by 20 times after the June 2022 split.

What you could have made on AMZN

At the end of August 2, 2021, a share of Amazon stock closed at $166.57 per share. By that date, Amazon's stocks had split three times (twice 2-to-1 and once 3-to-1), resulting in a 12 times increase in the number of shares you would have owned (2 x 2 x 3 = 12).

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Since the June 6, 2022 stock split was a 20-to-1 split, if you had purchased Amazon stock in 1997, you would now own 240 times the number of your original shares — 12 times due to the previous three splits times 20 for the last split.

So, how much would you have now if you had invested $1,000 in Amazon during the 1997 IPO? At that time, Amazon's stocks cost $18 per share. As a result, you would have owned about 55 shares with a $1,000 investment ($1,000 / 18 = 55 shares).

However, due to Amazon's four stock splits, you would now own 13,200 shares rather than just 55. That's because the total stock splits resulted in a 240 times increase in the number of shares each investor owned (240 x 55 shares = 13,200 shares).

At the end of Aug. 2, 2022, Amazon’s share price closed at $134.16. That means your total amount of shares would be worth over $1.7 million (13,200 shares x $134.16 per share = $1,770,912) on that date.

Why AMZN split shares

You may wonder then why Amazon has ‌split shares if the amount of money invested by shareholders is the same. One of the big reasons is the cost for a single share was pretty high for the average investor, so splitting the stock may make it more attractive — and more affordable — to new investors.

For example, at the opening of trading on June 6, the first trading after the stock split, Amazon shares cost $125.25 per share. For comparison, at the close of trading on June 3, right before the split, Amazon shares cost around $2,447 per share.

"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," Amazon said in a statement about the stock split earlier this year.

Another reason for a potential stock split is liquidity. By increasing the number of shares, a company could also increase its liquidity, which is its ability to convert its stocks into cash. So, Amazon will create a larger number of shares without having to change the valuation of the company.

Announcing a stock split could also give a company a boost in its current stock price. For example, Amazon’s stock went up a whopping 6% in after-hours trading on the day the stock split was announced. And a week after the announcement, the stock broke above the $3,000 mark.

AMZN’s stock split terms

That being said, a 20-to-1 stock split is unusual as most companies use a 2-to-1 or 3-to-1 stock split. But the high split isn’t unique: Google announced a similar split earlier this year, which went into effect for Google shareholders at the close of trading on July 15.

Amazon also announced that it would buy back some of its shares, worth up to $10 billion. A share buyback reduces the number of outstanding shares, which means the supply of shares for investors to buy goes down. This may mean the stock’s earnings per share (EPS) might grow faster and also may make the stock more appealing to investors.

Should you still buy Amazon?

As with all stocks, investing money in Amazon shares may or may not be a smart investment, but much of that depends on the market as well as your own financial portfolio. Look at the basics to decide what’s best for you.

The various stock markets tend to be volatile based on current events. When you are deciding whether to buy Amazon shares, ‌consider why the stock price may have gone up or down beyond the fundamentals of the company. Also, think about the direction the company is going.

If you think Amazon has good ideas or future projects, then perhaps you should buy the stock. If you’re worried about the stock price in the past year or the company’s plans, maybe you should hold off. In any case, it’s important to research any company before you invest in its stock.

What the stock split says about Amazon

The stock split itself could also be a factor in your decision. A stock split may be a sign that a company is doing well because its share price has increased, and it also could bring in new investors who are attracted to the more affordable share price. On the other hand, it also could cause some volatility in the stock, so you may want to be prepared for changes in the price.

If you do decide to buy stock in Amazon, you may be worried that you weren’t able to buy shares before the split. But remember, the amount of money you invest in a stock will remain the same before or after a split, so you might not make money by getting the stock right before or even right after the split.

A study by the Wall Street Journal last year looked over stock split data from the past 40 years and found that overall, stocks gained an average of 1% six months after their split. But that’s not a guarantee, and like any stock market investment, a share price could go down in the months after a split.

Bottom line

Before you go out and buy Amazon, do some research and take into account things like your budget and your current investments. Remember that with all stock market investments, you are taking a risk, and stocks could rise and fall depending on a number of market factors.

If you decide you want to invest in it, look into some of the best brokerage accounts to see whether one of them may be a good fit for you as you invest in stocks.

What stocks will split in 2022?

Mega Caps That Split In 2022. Stock splits have been all the rage in 2022, with mega caps like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Tesla, Inc.

How much was Amazon stock when it split 2022?

Amazon stock traded for around $2,500 per share prior to its 20:1 stock split in early June 2022. This means that an investor would need to have $250,000 of Amazon stock in order to sell one option since options are sold in lots of 100. The split suddenly opened up the options market for many average investors.

Is Amazon a good investment for 2022?

Amazon (AMZN -3.43%) has long been a stock market darling, but 2022 has been a rough year for the tech giant. Its share price is down 40% year to date, and it just became the first publicly traded company ever to lose $1 trillion in value, a reflection of just how far the company and its FAANG stock peers have fallen.

Is Amazon gonna split?

Amazon Announces 20-1 Stock Split The board said the 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.” When a company splits its stock, that means it divides each existing share into multiple new shares.

amazon stock split