The short answer is that Amazon stock will not split anytime in the future because there is not a pressing issue or reason for it split such as being part of an index that requires a specific price. In addition, the recent sell-off in the tech sector makes it even more unlikely.
But Amazon didn’t mention anything about a potential split when the company reported earnings last week. Amazon was not immediately available for comment when asked by CNN Business if the company was considering a stock split , while a spokesperson for Alphabet declined to comment.
Moreover, will Amazon’s stock split help it get into the Dow Jones?
Amazon’s move may also be aimed to get it included in the famed Dow Jones Industrial Average, which tends to include less expensive stocks. Apple (AAPL), for example, announced a 7-for-1 stock split in 2014 and got included in the Dow in 2015.
Stock splits usually happen when the price of a company’s shares has gotten very high. In a stock split, a company divides up its shares to lower their price and increase the overall amount of shares available. In Amazon’s case, existing shareholders will receive 19 additional shares for every share they already own.
The same can be said for Google, whose parent company Alphabet unveiled plans for a 20-for-1 stock split last month, likely to take place in July, that would leave investors with one Google stock and a dividend payment of 19 more shares, all price at around $160 each.
Is Amazon’s stock split a zero-sum game?
A stock split is a zero-sum game . A single share of Amazon at $3,700 would be the same thing as 50 shares at $74. However, it’s not easy to trade options on a $3,700 stock.
Take the idea with a grain of salt, for a couple of reasons . The first is, lots of predictions never pan out. Second, a bunch of other companies may well beat Amazon to the punch. Microsoft, Apple, and Tesla have all been suggested of late as candidates for a stock split, for reasonably good reasons.
What are stock splits and how do they affect your investments?
Stock splits may not have an impact on the value of your shares but they are a great way to entice more people to invest . Instead of paying $3,000 for a share of Amazon, investors will have a chance to own a whole share for $150.
How much does it cost to own a whole share of Amazon?
Instead of paying $3,000 for a share of Amazon, investors will have a chance to own a whole share for $150 . If the four-figure stock price kept you from owning a whole share of Amazon in the past, you’ll have a chance to join the club after the stock split.