Amazon’s (AMZN) shares of the e-commerce giant soared 7% in pre-market trading on Thursday on the heels of a 20-for-1 stock split announcement. The company also uncorked a massive $10 billion stock buyback plan. The stock is about to get much cheaper on paper, and investors are loving the newfound opportunity.
Amazon Is Splitting Its Stock.
Amazon.com shares are moving sharply higher in after-hours trading after the e-commerce and cloud-computing giant declared a 20-for-1 stock split and announced an expanded stock-repurchase program.
Amazon’s stock split is the fourth one in its history. The last split came in September 1999. While Amazon’s stock split technically doesn’t change the fundamentals of the company, it could entice investors back into a stock that had been treading water amid slowing growth as the company picks up spending on various initiatives.
If shareholders approve of the split, it will begin trading on the new basis on June 6. Apple split its stock 4-for-1 in the 2020s. Tesla’s 5-for-1 stock split also occurred in 2020. Alphabet’s 20-for-1 stock split was announced in February.
Amazon also announced a $10 billion stock-repurchase plan, replacing a previous $5 billion stock-purchase authorization in which it had bought back $2.12 billion of its shares. The program doesn’t have a fixed expiration date.