Amazon.com Inc’s shares soared 5% as the e-commerce behemoth announced a major share split and buyback, attracting more investors to a stock that has seen its price soar since coming public 25 years ago.
The 20-for-1 stock split is the company’s first since 1999, and it comes on top of a $10 billion share buyback. It also follows Alphabet Inc’s (GOOGL.Oannouncement )’s similar split earlier this year.
“Amazon’s management is looking to instill fresh confidence,” AJ Bell Investment Director Russ Mould said, adding that the buyback was the company’s first direct distribution of cashback to its shareholders since its stock market debut.
After riding a pandemic-induced boom in tech stocks that brought it within striking reach of a $2 trillion value milestone, the company’s stock closed around a two-year low at $2,785.58 on Wednesday.
According to sentiment aggregator Swaggystocks, Amazon’s stock ticker was trending on investor-focused social media site stocktwits.com and was among the most discussed on Reddit’s wallstreetbets.
After their stock splits in 2020, Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) both saw significant gains, with Tesla eventually joining the S& P 500 by the end of the year. The rise in Amazon’s stock on Thursday was a bright spot in an otherwise bleak market, with shares of mega-cap companies like Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) trading down.
