Amazon shares are going to be 20 times less expensive as the company announced its board approved a 20-for-1 stock split. The company announced the news on Wednesday and is its first split since 1999. If shareholders approve the move in May, the split will go into effect on June 6.
On Wednesday, Amazon closed at US$2,785 per share and if the stock split were to happen today, it would be worth US$139 a share. For current shareholders, their stakes will be worth the same, as they will be holding 20 times more shares when all is said and done. There are numerous reasons why a company would want to perform a stock split.
Splits can put their stock within reach of smaller, individual investors. It can also help companies gain liquidity and splits can create more demand for a company stock. Amazon could also be aiming to be included in the prestigious Dow Jones Industrial Average, which tends to include less expensive stocks.
For more information about the source click HERE
