Amazon, the world’s largest e-commerce company, decided to split its stock 20 to 1 on the 9th (local time) and purchase treasury shares worth $10 billion.
Amazon approved the stock split plan and treasury stock purchase plan at the board meeting, economic media CNBC reported.
As a result, Amazon shareholders will have 20 shares per share.
It is the fourth time in more than 20 years that Amazon has come up with a stock split plan since the IPO in 1997, CNBC said. Amazon had split shares three times in 1998 and 1999.
Amazon said the split will increase the flexibility of shareholder management and access to purchases by prospective investors.
Amazon shares, which will be split if the closing price is applied on this day, will be adjusted from $2785.58 to $139.28.
The actual stock split is scheduled to take place on June 6.
Investors are expected to increase further as the stock split lowers the access threshold for Amazon stocks.
Amazon has also decided to buy $10 billion worth of treasury stocks.
The purchase of treasury stocks has the effect of raising stock prices by reducing the number of distributed stocks.
Amazon’s move is joining the stock split trend of large IT companies.
Google’s parent company Alphabet announced a 20-to-1 split last month.
In addition, Apple split its shares 4 to 1 the year before last and Tesla split them 5 to 1.
Michael Patcher, an analyst at Wedbush Securities, told Bloomberg that giving employees the entire week, not part of the stock, will increase satisfaction.
He said, “Stocks traded at $100 or less per share have a much thicker individual investor base. But I don’t think that’s the reason for Amazon’s stock split, he said.
