SIMONE DEL ROSARIO: AMAZON STOCK JUST GOT A LOT MORE AFFORDABLE. IN FACT, WE HAVEN’T SEEN A SHARE PRICE THIS LOW SINCE 2010.
BUT IT DOESN’T MEAN THE COMPANY’S ANY CHEAPER.
ON MONDAY AMAZON STOCK SPLIT FOR THE FIRST TIME THIS MILLENNIUM, TURNING ONE SHARE – INTO 20.
IT MADE THE PRICE GO FROM A LESS ATTAINABLE 2,447 DOLLARS – TO 122 AND CHANGE.
WITH A STOCK SPLIT LIKE THIS – IT’S REALLY THE EQUIVALENT OF TRADING A 20-DOLLAR BILL FOR 20 ONE-DOLLAR BILLS.
SO WHY DO IT?
SIMPLE. IT GIVES MORE INVESTORS ENTRY ACCESS INTO ONE OF THE BIGGEST COMPANIES IN THE WORLD. YOU MAY NOT HAVE HAD OVER TWO GRAND TO INVEST IN A SHARE OF AMAZON BEFORE, BUT YOU MIGHT HAVE OVER A HUNDRED BUCKS, WHICH IS NOW ALL IT TAKES.
AND THAT CAN BE VERY LUCRATIVE FOR THE COMPANY. ACCORDING TO BANK OF AMERICA RESEARCH, S&P 500 COMPANIES THAT SPLIT SHARES RETURN 25% ON AVERAGE OVER THE NEXT 12 MONTHS, COMPARED WITH A 9% AVERAGE INDEX RETURN.
AMAZON’S NOT THE ONLY ONE LOOKING TO ENTICE NEW INVESTORS WITH A LOWER SHARE PRICE.
GOOGLE OWNER ALPHABET IS SPLITTING NEXT MONTH AND TESLA PLANS TO VOTE ON A SPLIT LATER THIS SUMMER.
IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.