Amazon.com (AMZN) Shares Surge 7% as Stock Split News Stirs Dow 30 Addition Talk
Amazon.com, Inc. (NASDAQ: AMZN) shares were trading more than 7% higher after-hours following the company’s announcement, according to which, its Board of Directors approved a 20-for-1 split of the company’s common stock, which is subject to shareholder approval of the Amendment at the 2022 Annual Meeting of Shareholders, scheduled to take place on May 25. Upon approval, each shareholder of record at the close of business on May 27 will receive 19 additional shares of common stock for every one share held in their accounts on or about June 3. Trading on a split-adjusted basis will start on June 6.
Furthermore, the company’s Board of Directors authorized a share repurchase of up to $10 billion of the company’s common stock, which will replace the previous $5 billion stock repurchase authorization, under which the company had repurchased $2.12 billion of its shares.
News of the stock split has stirred speculation that the company could become eligible for the Dow Jones Industrial Average if the split is approved by shareholders. The Dow is a price-weighted index, so the current Amazon stock price of around $3000 makes it ineligible.
This is the first stock split from Amazon since the dot com bubble era of 1999 when the company completed three stock splits over a two-year span.