Amazon.com Inc (NASDAQ:AMZN) will split its stock on a 20:1 basis for the first time in decades in an effort to make the stock more affordable for retail investors.
Shares of Amazon, which closed at US$2,135.50 Wednesday, could get more affordable, bringing down prices to about US$106+, as it applies to all three classes of stock with a lower price attracting more investors.
Rival tech giant Alphabet Inc (NASDAQ:GOOG) (Alphabet Inc (NASDAQ:GOOG)), Google's parent company, announced a 20-for-1 split in February, and Tesla Inc (NASDAQ:TSLA) (Tesla Inc (NASDAQ:TSLA)) announced a 5-for-1 split, while Apple Inc (NASDAQ:AAPL) (Apple Inc (NASDAQ:AAPL)) announced plans for a 4-for-1 split mid-2020.
Though Amazon's 20:1 stock split was supported by shareholders, another vote to create better working conditions for warehouse workers and to review its use of plastics was blocked by shareholders.
"Amazon ramped up its labour force to match a surge in pandemic demand, but it’s now facing a dilemma – it needs to reduce its army of workers to be more in tune with slowing sales growth but needs to avoid kicking off fresh labour disputes over working conditions," said analyst Susannah Streeter.
The company's board has also authorised Amazon to buy back up to US$10bn in shares.
The stock split comes just nine months after Andy Jassy took over as chief executive, replacing Jeff Bezos.
Amazon shares are up more than 4,300% since the last split was announced on September 2, 1999, but the stock is down 29% since the proposed share split was announced on March 10, 2022.
"Amazon’s share price has fallen by 37% year to date, as worries wash over the financial markets about the era of ultra-cheap money coming to an end," Streeter added.
It posted its first quarterly loss since 2015 during the first quarter.