What Happens if I Buy Amazon Before the Stock Split? – Buffalo News

Amazon‘s (NASDAQ: AMZN) much-anticipated stock split may finally take place this year. On Wednesday, March 9, the tech giant filed a Form 8-K with the Securities and Exchange Commission (SEC) and the stock price soared. Amazon notified investors about plans for a 20-for-1 stock split — the first in over two decades. If you own shares of Amazon, you’ll be the recipient of 19 extra shares for every one share in your account after the stock split.

Here are a few things to consider before you dive in.

Image source: Getty Images.

What you should know about Amazon’s stock split

Amazon’s board of directors approved a 20-for-1 stock split that’s slated to take place on June 3. However, nothing is set in stone until shareholders give Amazon the green light at the company’s annual meeting on May 25.

If all goes as planned, shareholders on record as of May 27 will be granted 19 additional shares for every one share they own. That means if you have two shares of Amazon in your account now, you’ll have 40 shares after the split.

Receiving additional shares in your account may sound like a sweet deal if you’ve been eyeing Amazon’s stock for a while. But a stock split in itself won’t make your wallet fatter. It just allows more people to gain access to a full share of Amazon stock at a cheaper price. You can think of it like exchanging a $20 bill for 20 singles. That transaction didn’t make you richer; you just walked away with the same amount of money cut up in bite-sized pieces.

Next Post