Amazon Stock Split: Why It Matters

Amazon (NASDAQ: AMZN) recently completed a much-talked-about stock split. Why was it such a big deal? Because Amazon's last such split was more than 20 years ago. As Amazon shares soared -- eventually reaching more than $3,000 in recent times -- investors speculated about a potential split. So when the company finally announced the move, it grabbed everyone's attention.

A stock split doesn't change anything fundamental. The company issues new shares to current holders, bringing down the price of each share accordingly -- and the market value of the company remains the same. Does that mean we can call the recent stock split a "nonevent" for Amazon? Not necessarily. Let's take a look at why Amazon's stock split really does matter.

Amazon announced a 20-for-1 split in mid-March. That means investors holding one Amazon share received 19 additional shares. At a pre-split price of about $2,000, the operation brought Amazon stock down to about $124.

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Source Fool.com