Amazon stock split question

[lucky penny]

Amazon announced a 20-1 stock split for shares held as of May 27, which shows up on June 3. I see there's a big jump in the price today, so just wondering how the split affects purchases between now & June 3 if those buyers don't get the additional shares.

 

[SecondCor521]

Not quite. Amazon approved the stock split in a shareholder meeting last week. Anyone holding shares at the close of business this Friday June 3 will be granted an additional 19 shares over the weekend. This would include anyone buying (and holding) shares between now and then.

You can expect the stock to trade at about 1/20th of it's Friday close at the open of the market on Monday.

The increase in price today is probably just people getting excited about the stock based on the news. Plus there is a potential according to an article I saw for AMZN to be added to the Dow after the stock split, so although I don't know how likely that is, that prospect may account for some buying activity as well.

 

[Montecfo]

Stocks often rally both into and subsequent to a split. It is a known market effect since a split reflects the confidence of management and perhaps it suddenly seems "cheaper".

But it kind of reminds me of this old boy down home who was ordering a pizza.

"Would you like it cut into 6 or 8 pieces?", he was asked.

After some reflection he said,
"Better make it 6. I don't think i can eat 8".

 

[lucky penny]

Thanks! I got that info from a Motley Fool item I found after a Google search about the split:

"Shareholders gave Amazon the green light to move forward with a stock split at the annual shareholder meeting. All shareholders on record as of May 27 will see 19 additional shares of stock for every one share they own on the big day. If you have two whole shares of Amazon stock in your account by the deadline, you'll receive 38 additional shares after the stock split. The stock split will take place on June 3, and the price per share will reflect the split on June 6."

I bought AMZN last week so I was excited to hear about the split, then sorry I hadn't bought more. But I had to smile when I read that post since that's exactly what I bought: "two whole shares"!

 

[braumeister]

But I had to smile when I read that post since that's exactly what I bought: "two whole shares"!

I guess they write it that way because there are many who buy fractional shares and the calculation becomes a bit more involved in that case.

 

[audreyh1]

In any stock split I dealt with, if the split didn’t result in an whole number of shares, I was paid the fractional remainder in cash. In this case someone with whole shares will be fine. Someone holding fractional shares now and also after the split may get a little cash back.