Amazon.com said it will split its stock 20-1 subject to a vote of shareholders scheduled May 25. The shares jumped about 7% in extended trading on the news.
The e-commerce giant’s board also approved a $10 billion share buyback program, the company said Wednesday in a regulatory filing. The repurchase authorization replaces a current $5 billion plan approved in 2016. the company bought $2.12 billion under that plan.
Because it’s one of only seven companies in the S&P 500 that trade for more $1,000, Amazon has long been the subject of speculation about a potential split. The company previously split its stock three times in 1998 and 1999. The shares closed at $2,785.58 Wednesday in New York.
Share splits had almost disappeared from U.S. stock markets recently, with only two in 2019 compared with 47 splits in the S&P 500 in 2006 and 2007. But Apple Inc. and Tesla Inc., brought tback he practice after splitting their stocks in 2020.
A lower stock price makes it easier for mom-and-pop traders to buy shares rather than purchase fractional stocks through their brokerage firms.
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