Amazon shares may soon become more affordable for the average investor as shareholders prepare to vote on the 20-for-1 stock split at Wednesday’s annual meeting.
The move would whittle shares down to about $104, based on Tuesday’s $2,082 closing price, and applies to all three classes of stock. The lower price could attract more investors.
“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. If approved by shareholders at our annual meeting in May, shareholders would see the split-adjusted shares reflected in their accounts in early June,” the company said in a statement shared with FOX Business after the announcement.
The move was announced just about nine months after Andy Jassy became CEO, taking over from Jeff Bezos.
Since the proposed share split was announced on March 10, the stock has dropped 29%. During the first quarter, Amazon posted its first quarterly loss since 2015 of $3.8 billion or $7.56 per share compared to $8.1 billion, or $15.79 during the same period a year ago.
Adding to the negative sentiment, all three of the major averages are off sharply for 2022 with the Nasdaq Composite down 28% this year.
Still, Scott Redler, co-founder of T3 Trading, sees some opportunity with the split, which he thinks will be approved.
“The next quarter or so will be very challenging. So don’t buy it all at once” Redler told FOX Business. “The S&P 500 can see 3,600 this summer. If that’s the case there will be better entries.”
Shareholders will vote Wednesday at the tech giant’s annual virtual meeting.
If approved, investors of record on May 27, 2022, will receive 19 additional shares for every one held, the company detailed in a filing with the Securities and Exchange Commission. Trading of the split shares will begin on June 6.
Amazon joins Google, which also announced a 20-for-1 split in February. Its shares closed at $2,119.40 Tuesday. Tesla, in March, floated the idea after disclosing that its board of directors approved a proposal to enable a stock split in the form of a dividend, contingent on final board approval. Its shares closed at $628.16.
Stock splits could bring some of these high-priced stocks closer to the average stock price of S&P 500 companies, which is $175.40, as tracked by Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
“It’s back in vogue, and we expect more,” Silverblatt told FOX Business.
social experiment by Livio Acerbo #greengroundit – original source here