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Amazon Surges as Stock Split, Buyback Excite Investors
Published by Jessica Weisman-Pitts
Posted on March 10, 2022
2 min readLast updated: February 8, 2026
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Company
Published by Jessica Weisman-Pitts
Posted on March 10, 2022
2 min readLast updated: February 8, 2026
Add as preferred source on Google(Reuters) – Shares of Amazon.com Inc jumped over 5% after the e-commerce giant’s share split and buyback moves stand to draw more investors to a stock whose recent performance has been lackluster despite skyrocketing since going public 25 years ago.
(Reuters) – Shares of Amazon.com Inc jumped over 5% after the e-commerce giant’s share split and buyback moves stand to draw more investors to a stock whose recent performance has been lackluster despite skyrocketing since going public 25 years ago.
The company on Wednesday announced a 20-for-1 stock split, its first since 1999, and a $10 billion share buyback. It comes on the heels of a similar split announced by Alphabet Inc 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 distributions of cash back to its shareholders since its stock market debut.
Amazon shares were up 5.4% to $2,936.99 in early trading on Thursday. The company’s stock closed at $2,785.58 on Wednesday, near a two-year low after riding a pandemic-induced rally in tech and growth shares that brought it within striking distance of a $2 trillion valuation mark.
Amazon’s stock ticker was trending on investor-focused social media site stocktwits.com and was among the most discussed on Reddit’s wallstreetbets, according to sentiment aggregator Swaggystocks.
Shares of Apple Inc and Tesla Inc rallied sharply after their stock splits in 2020.
Amazon’s stock split “just makes inexperienced investors and traders feel better,” said Perri Dong, a China-based portfolio manager at Redwood Winslow LLC, who said he owns Amazon shares.
“It’s just psychological. Some people believe the shares will have more liquidity, but I argue it doesn’t matter.”
Amazon shares have struggled along with other growth stocks in 2022, falling 16.5% year-to-date as of Wednesday’s close.
“To state the obvious, buybacks also suggest Amazon sees value in the stock here,” BofA Global Research analysts said in a note, adding that the repurchases would amount to about 0.7% of shares outstanding.
The company went public in 1997 at an IPO price of $18, or $1.50 when adjusted for stock splits that occurred in 1998 and 1999. The latest stock split will take effect on June 6.
Amazon’s share surge on Thursday was a bright spot in an otherwise gloomy market, where shares of megacap companies such as Apple and Microsoft Corp were trading lower.
Grpahic: Amazon versus mega tech stocks: https://graphics.reuters.com/AMAZON.COM-STOCKS/zjpqkoggopx/Amazon%20versus%20mega%20tech%20stocks.jpeg
(Reporting by Nivedita Balu and Medha Singh in Bengaluru, Lewis Krauskopf in New York; Additional reporting by Tiyashi Datta in Bengaluru and Jason Xue in Shanghai; Editing by Anil D’Silva and Jonathan Oatis)
A stock split is a corporate action in which a company divides its existing shares into multiple new shares to boost liquidity. For example, a 20-for-1 stock split means each existing share is divided into 20 shares.
A share buyback occurs when a company purchases its own shares from the marketplace, reducing the number of outstanding shares. This can increase the value of remaining shares and return capital to shareholders.
Market capitalization is the total market value of a company's outstanding shares, calculated by multiplying the share price by the total number of shares. It indicates the company's size and market value.
Liquidity refers to how easily an asset can be converted into cash without affecting its market price. High liquidity means assets can be sold quickly, while low liquidity indicates it may take longer to sell.
Investor sentiment is the overall attitude of investors toward a particular security or financial market. It can influence market trends and is often gauged through surveys or market performance indicators.
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