Analysts say that if you’re an average investor, Amazon’s (AMZN) lower share price could be exactly the right time to enter a growing company with big potential catalysts.
This week, Amazon announced a 20-for-1 share split. The company also revealed a massive $10 billion share buyback plan.
Amazon’s stock split was the fourth in its history. The last split occurred in September 1999.
If shareholders approve the split, trading on the new basis will begin on June 6.
“A stock split is important. It increases accessibility to a wider range of investors and allows it to be included in the Dow Jones Industrial Average (^DJI). Scientifically speaking, does this change the stock price? No, but it makes it more accessible, and if you’re included in the Dow, the funds will have to own you. This creates demand for the stock,” said Wells Fargo technical analyst Brian Fitzgerald on Yahoo Finance Live.
The e-commerce giant’s shares rose 5% on Thursday as traders welcomed Amazon’s stock split and new buyout. Shares gained another 1% in Friday’s session.
The stock has been among the most popular tickers on the Yahoo Finance platform in the last 24 hours.
Fitzgerald adds that investors should not overlook Amazon’s buyback announcement as it provides important clues about future earnings.
“We believe that buybacks are further evidence of a closer focus on profitability. Amazon has had a significant investment cycle over the past two years to support the rapid expansion that has taken place during COVID. based on numbers,” Fitzgerald said.
Brian Sozzi is the editor-in-chief and Lead at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and beyond LinkedIn.
Follow Yahoo Finance at Twitter, facebook, Instagram, flipboard, LinkedIn, YouTubeas well as reddit