The big news that caught our attention last week was Amazon's (AMZN) plan to carry out a stock split as well as a $10 billion share buyback program. Wow!
FYI, guys, if this happens, it will be their first stock split since 1999 and their fourth stock split since AMZN conducted its IPO in 1997.
What is a stock split?
A stock split is when a company increases the number of shares outstanding to increase stock liquidity.
For us retail investors, this means that the share price per share becomes more affordable.
One Amazon stock costs about $2,785. A 20-for-1 stock split means investors will receive an additional 19 shares for every share they hold.
An investor who initially owns one Amazon stock at $2,785 will own 20 Amazon shares priced at $139.25 each after the stock split.
Distributions of the stock split will be made to Amazon shareholders at the close of business on June 3 this year, and trading will begin on an adjusted basis on June 6.
Wait, there's still more info from Amazon, guys.
Amazon also announced that its Board of Directors has approved a plan to buy back shares worth up to $10 billion.
Wow… it looks like they have excess cash and are choosing to reinvest it in their own company stock, which will ultimately increase the return to shareholders.
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