Daniel Acker/Bloomberg/Getty ImagesĬhewy may be getting out of Wall Street's doghouseīut here’s the thing: Even though a stock split may make it seem like a share is now more affordable, it doesn’t actually make the stock any cheaper when looking at valuation measures like price-to-earnings or price-to-sales ratios.Īmazon will still be worth about $1.3 trillion after the split takes place.

(GME) have proposed splitting their stocks as well.Ī Chewy toy arranged in Tiskilwa, Illinois, U.S., on Tuesday, June 8, 2021. (SHOP) has a 10-for-1 stock split planned for later in June, while Tesla (GOOGL), which trades at a price of more than $2,300 and has a market cap of nearly $1.5 trillion, also has approved a 20-1 split that will occur in July. Why is Amazon doing this now? Companies with sky-high stock prices often announce splits in order to make shares seem more affordable to retail investors. So the value of your investment does not change, and one Amazon share that traded for just under $2,450 would become 20 shares that each cost a little more than $120. The split, which takes effect Monday, will be a 20-for-1 transaction, meaning that if you owned one share of Amazon, you’ll wind up with 20 shares after the split that each cost about 1/20th of the previous price. (AMZN) is doing what’s known as a stock split, which increases the number of shares outstanding that a company has and also lowers its stock price, making it more affordable for the average investor. A nice vacation? That home entertainment system? Season tickets for your favorite sports team? There are a lot of things a person can spend about $2,500 on instead of one tiny piece of “Prime” stock market real estate.

For many average investors, the price of just one Amazon share has been prohibitively expensive.

Amazon price