Amazon Approves First Stock Split Since Dot-Com Era, Dow Inclusion a Possibility



Stock Split Like It’s 1999

Amazon’s (AMZN) midweek announcement that its board of directors approved a 20-for-1 stock split marked the fourth such split since the company first went public in 1997. It’s the first since 1999, the height of the dot-com era. Amazon says its board also approved buying back up to $10 billion worth of shares.

Analysts note that stock splits don’t change anything about a company’s fundamentals. The thinking behind the move is that by expanding the number of shares at a lower individual price, more people will be able to invest in the company. Amazon specifically notes the stock split is aimed at giving employees more flexibility when it comes to the managing of their company shares.

Amazon After Alphabet

The split announcement from Amazon continued a recent trend in Big Tech, as just last month Google parent company Alphabet (GOOGL) announced a 20-for-1 split. Both Apple (AAPL) and Tesla (TSLA) informed investors of stock splits in 2020.

Amazon stands apart, however, in that it’s the highest-valued tech company to dilute its share price by way of a stock split. The move comes after Amazon posted its slowest rate of quarterly growth since 2001. Changes were also recently made to the company’s employee compensation strategy.

Could Dow Inclusion Be Next?

A number of market observers are now openly wondering if Amazon’s stock split is a precursor to the company’s inclusion in the Dow Jones Industrial Average. Representatives of Standard and Poor’s Dow Jones Indices and Wall Street Journal editors form a committee that decides who is included in the 30-member club.

Amazon isn’t the only tech firm eyeing potential inclusion in the Dow. Some analysts argue it could end up being a “draw” in terms of whether Amazon or Alphabet might join the blue-chip average first. In 2020 both Salesforce (CRM) and Honeywell (HON) became the most recent companies to gain inclusion into the Dow. Salesforce, Apple, and IBM (IBM) rank as the biggest tech names in the index. The 20-for-1 stock split could set Amazon up to join the ranks.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22031101


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.


TLS 1.2 Encrypted
Equal Housing Lender