With a price divided by 20, Amazon stock becomes more accessible to investors

(BFM Bourse) – Valued at nearly 3,000 dollars per share, Amazon will become much more accessible on the stock market this Monday with the division by 20 of its share. The e-commerce giant is following in the footsteps of other tech giants such as Apple and Tesla or more recently Alphabet, which have already proceeded or are considering a “split” to bring their share price down to a more reasonable level, without penalizing shareholders. existing.

After Apple and Tesla in 2020, it is Amazon’s turn to have carried out a “stock split”, equivalent in French to a division of the nominal value of its share. On March 9, Amazon’s board of directors announced its intention to split the stock by 20, which was worth $2,785.58 the day before the announcement. At the height of its history, in November 2021, the title had even climbed to more than 3,700 dollars.

In concrete terms, shareholders who hold a share on May 27 will receive, without having to do anything on their account, a few days later, on June 3, 19 additional shares for each share held, the value of each share being automatically divided by twenty. .

For future investors, this puts the title within reach of a greater number of people and makes it possible to split their orders more finely if necessary. Arithmetically neutral, a stock split is not a non-event, however: it is an indicator of strong stock market strength, although it should be noted that Amazon’s decision comes after a notable correction.

In itself, a stock split is therefore perceived as a bullish signal, which studies tend to confirm (see Ikenberry, Rankine and Stice, What do stock splits really signal? in the Journal of Financial and Quantitative Analysis). The positive reaction of the share seems to confirm it, since the price appreciated by 17% a few days before the operation.

©2022 BFM Bourse

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