Amazon’s first stock split since the ’90s provides a distraction — and a bump
![Smaller pieces, same pie [Andriy Onufriyenko/Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/3ceqxdhqiaxGc2UGgwvG1Z_1_GettyImages-1264411425.jpg)
Go ahead, have another slice… In fact have 19. This week Amazon’s board approved a 20-for-1 stock split. It means an investor with one Amazon share today will get that split into 20 shares on June 3. The Zon’s first split in 23 years comes after its stock had fallen 26% from its November record.
- Smaller slices, same Zon: The split doesn’t directly affect Amazon’s fundamentals or market cap: it’s more slices, but the same amount of corporate pizza.
- Shares still jumped more than 5% yesterday, for Amazon’s second-best day of the year (that does affect its market cap). It could be because Amazon also announced a $10B share buyback, its biggest ever.
- Convenient timing: Congress just accused Amazon of “lying” in an antitrust investigation, and the split could offer a welcome distraction.
Why so split-y?… Companies with soaring stocks sometimes slice them into smaller pieces to make shares cheaper for retail investors to buy. Amazon’s $3K+ share price might seem too big for some investors to swallow. Apple, Tesla, and Google also split their stocks in the past two years, after huge pandemic gains. All four companies have cracked a $1T market cap, though Tesla has since fallen out of the four-comma club.
Stock splits are mostly cosmetic… but they do create buzz. Now that fractional shares are becoming widely available at brokerages, stock splits aren’t as big a deal anymore. Fractional shares take affordability much further than splits, since you can set your dollar amount. Still: splits suggest that a company is confident about its stock's growth.