Amazon shares jumped late Wednesday as the e-commerce giant announced a 20-for-1 stock split and authorized a $10 billion buyback plan.
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According to Amazon (AMZN), registered shareholders will receive 19 additional shares at the close of trading on May 27 for each share they own. This will be reflected in their invoices on June 3rd or so. Trading will begin on a split-adjusted basis on June 6. The agreement is subject to shareholder approval.
Amazon shares rose 7% to 2990 after the stock market closed today.
The company will hold its annual shareholder meeting on May 25. The $10 billion buyback plan replaces the previous $5 billion plan, of which $2.12 billion was bought back in equity.
Amazon shares fall 26% from record high
Amazon joins several big tech companies in announcing a stock split. Google owner Alphabet (GOOGL), the parent company of Google, announced a 20-to-1 stock split on February 21. In August, Apple announced plans for a 4-to-1 split. Tesla also told investors in August that it would introduce a 5-to-1 split.
Stock splits lower the price of shares, possibly making them more attractive to retail investors.
As of Wednesday’s close, Amazon shares are down 26% from their all-time high of 3,773.08 set on July 13.
Please follow Brian Deegon on Twitter at @IBD_BDeagon for more information on technology stocks, analysis and financial markets.
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