In 1999, Amazon’s (AMZN) last stock split was held. Before the commencement of its revenue driver, Amazon Web Services (AWS), and prior to the debut of its subscription service, Prime. These two aspects aided in the development of Amazon, which has risen by over 7,700 percent in a fourteen-year period.
Amazon has just announced a 20-for-1 stock split. The split is planned to occur in June. This doesn’t impact the company’s market value. However, it reduces the value of each share. And this makes it easier for a wider range of investors to invest in the firm. Is this event poised to start a new era of success?
An e-commerce leader
Amazon is the most successful e-commerce company. And, as a result of Amazon’s split, the market has gone far beyond where it was when Amazon last split its stock. According to a research published in ScienceDirect in 1999, worldwide e-commerce was worth around $150 billion. The majority of transactions involved businesses.
By 2021, e-commerce sales in the retail sector had surpassed $4.9 trillion. And by 2025, it is expected to surpass $7.4 trillion.
In 2015, e-commerce made up just 7.4% of all retail sales. It went from 7.4% to 17.8% by 2020 and is expected to reach 24.5% in 2025.
The rise in the value of e-commerce sales, as well as the fact that more and more individuals are making purchases online, are important growth drivers for Amazon. According to Insider Intelligence, Amazon has around 40% of the e-commerce market in the United States. As a result, Amazon is in an excellent position to profit from overall e-commerce expansion.
Good news for investors
The good news for investors is that this movement might be the key to Amazon’s next golden age.
To keep customers coming back, the firm has continued to invest in its Prime service. The free same-day delivery service in the United States, for example, has increased from 48 cities to 90 since 2018. Amazon has boosted the number of items eligible for free Prime shipping by 50%. And Amazon Pharmacy was created by Amazon to allow consumers to get their prescriptions filled and sent for free.
Everything is in place for Amazon customers to continue purchasing. This should result in increased income and revenue. And as more outstanding Amazon earnings reports surface, this dynamic retail stock may climb even further.