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Amazon stock split history: what you need to know

Amazon has grown from a humble bookseller to one of the largest and most influential companies in the world. Find out about Amazon’s stock split history, and whether there will be another one in the future.

Amazon Source: Bloomberg

Amazon stock split history

Split ratio Price before split
2 June 1998 2:1 $85.68 (1 June 1998)
5 January 1999 3:1 $354.96 (4 January 1999)
2 September 1999 2:1 $119.06 (1 September 1999)

When Amazon (AMZN) splits its stock, it is increasing the total number of shares in the company by dividing its existing shares. In doing so, the number of shares will increase but the price of those shares will decrease by the same order of magnitude, which means that the market capitalisation of the company will remain the same.

The split ratio used by a company depends on how high its share price has risen and how much it wants the share price to fall by. For example, a two-for-one split will halve the stock price, whereas a three-for-one split will reduce it by two-thirds.

This being said, stock splits can cause a stock’s price to rise in time. This is because they make shares more accessible to new investors by releasing more shares into the market, which increases liquidity. As a result, demand can grow which will cause the share price to rise, along with the company’s market capitalisation.

Amazon stock split example

As an example of an Amazon stock split – or a stock split in general – let’s assume that a trader owned 200 shares of Amazon before 2 June 1998. As the table above shows, the split on 2 June 1998 was 2:1, which means that investors would have been issued an additional share for every share they already owned. As a result, the investor would own 400 shares of Amazon after the split.

Before this first stock split, Amazon’s share price was $85.68 (on 1 June 1998), meaning that each share was worth $42.84 – or exactly half – immediately after the two-for-one split.1

Amazon’s split-adjusted share price

If you had bought 100 shares of Amazon at its initial public offering (IPO) price of $18 a share – for a total of $1800 – and kept them all during the splits from June 1998 to September 1999, you would now have 1200 shares in Amazon.

Adjusted for a recent valuation of around $1900 a share, your initial $1800 investment would be worth approximately $2,300,000 at the time of writing.

Amazon chart

Amazon’s first stock split: 2 June 1998

Amazon’s first stock split took place on 2 June 1998, a little over a year after its 15 May 1997 IPO. The split was two-for-one and saw its share price halve. It closed at $85.68 the day before the split and opened at $43.62 on the day of the event. This was slightly more than half of the closing price due to out-of-hours trading.

A week after the split on 9 June 1998, Amazon closed at $51.24; a month later on 2 July 1998, it closed at $124.02.1 This sharp rise in the share price following the first split is indicative of the increased daily trading volume of Amazon stock, which went from around 8 million units at the start of June to anywhere between 28 million to 54 million at the start of July.

Amazon’s second stock split: 5 January 1999

The second stock split was a three-for-one split and it took place on 5 January 1999. This saw share prices go from a close of $354.96 the day before the split to an open price of $109.56 on 5 January 1999. This was slightly less than a third of the previous close price due to out-of-hours trading. Amazon closed at $138.00 the following day.1

A month later, the e-commerce giant closed at a price of $115.88 on 5 February 1999 – a drop in price which was reflected by a reduction in daily trading volume of Amazon stock around this time.1

Amazon’s third stock split: 2 September 1999

Amazon’s third stock split was on 2 September 1999 and it was another two-for-one split. The split saw prices go from a 1 September close of $119.06 to a 2 September open of $57.50. This was slightly less than half due to out-of-hours trading. The closing price on 2 September was $60.06, a moderate increase from the post-split open, reflecting the higher number of stocks available and increased buyer interest.1

A month later, on 1 October 1999, Amazon’s share price had risen to $77.25.1

Will Amazon stock split again?

There has been speculation in recent years over whether Amazon will issue another stock split. This speculation is in the face of what has been an impressive growth curve in the Amazon share price, which some traders believe is making Amazon stock inaccessible.

However, nothing has been done to control the price of Amazon’s stock since the last split in September 1999. When asked in 2017 whether he would split the stock again, Jeff Bezos – Amazon’s chief executive officer (CEO) – said that he would not rule it out, but that it was not imminent. As a result, it remains to be seen whether the e-commerce giant will split its stock.

A possible reason for Amazon to carry out a future stock split would be if it wanted to get a place on the Dow Jones Industrial Average. This is because Amazon’s high share price would have a disproportionate influence over the weighted index. One way for Amazon to remedy this could be through a stock split, which would decrease its share price to a more proportionate figure in the market.

That being said, only four of the world’s ten largest companies by market capitalisation are currently included in the Dow Jones, so it may not be much of a motivator for a future Amazon stock split.

Amazon stock split summed up

  • Amazon has had three stock splits in its history
  • They all took place within a 15-month time frame, from 1998 to 1999
  • Since the last split, stock prices have largely continued to rise
  • Jeff Bezos has not ruled out another split, but it currently looks unlikely
  • A possible motivator behind a future split could be if its share price rise to a level which would deter investors

1 Prices calculated using stock-split adjusted Yahoo data. Amazon had a 2:1 split in June 1998, a 3:1 split in January 1999, and a 2:1 split in September 1999.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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