Amazon. com’s stock has a very different price when it starts trading this morning. After a 20-for-1 split from Friday’s closing price of $2,447, the stock opens at around $122 each. It looks like it might open slightly higher than that.
Stock splits don’t mean much—shareholders simply get more shares for every one they hold and the price of each is lower—but it could boost the stock’s trading price.
For starters, at $122 apiece, the purchase price is more attainable to people who want to own a whole share of Amazon (ticker: AMZN) but were deterred by the higher, presplit price.
Another possible boost to the stock: It makes Amazon.com a contender for inclusion in the Dow Jones Industrial Average, an index that weights components by price. A high-price stock moves the index more than a low-price one, and a four-figure stock would wield outsize influence on the index. But that change won’t happen quickly. The last change to a Dow component was in 2020, when Amgen (AMGN), Honeywell (HON), and Salesforce (CRM) swapped in for Exxon Mobil (XOM), Pfizer (PFE), and Raytheon (RTX).
Amazon has split its stock four times since its initial public offering in 1997. It split 2-for-1 in 1998, 3-for-1 in January 1999, and 2-for-1 in September 1999.
The split may also drum up general enthusiasm for the stock, which is down more than 26% this year. A split suggests management is confident, and points to underlying financial success.
Amazon stock has gained 1.52% to $124.21 in premarket trading.
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