Does the Amazon Split Make the Stock a Buy?

There's been much talk and excitement following news of Amazon's (NASDAQ: AMZN) 20:1 stock split, but how does this change the landscape for those considering an Amazon investment? The truth is, despite the recent rally in Amazon shares, the stock split has no impact at all on the fundamentals of Amazon.

Companies often conduct a stock split to make their shares more affordable for smaller investors. With Amazon shares hovering around $2,500, a split makes sense in that context. A 20:1 split means shares valued at $2,447.00 at the close pre-split will be worth $122.35 afterwards.

However, that doesn't change the underlying value of the company. Because every investor will receive 19 additional shares for each one they already own, the market capitalization of Amazon will remain precisely the same.

Source Fool.com