Don’t worry, Amazon stockholders (which is pretty much everyone with a retirement account, these days) — your stakes will still be worth the same. You’ll be holding 20 times more shares when all is said and done.
Companies split their stocks for numerous reasons: Splits can put their stock within the reach of smaller, individual investors. It helps companies gain liquidity and splits can create more demand for a company’s stock.
Although deep-pocketed institutional investors don’t care about the company’s overall stock price, individual investors might be turned off by high-priced shares. The growth of zero-fee trading apps, including Robinhood, E-Trade and others, have made stock splits much more important in recent years.
In case potential shareholders weren’t convinced, the company threw in another incentive to buy: a repurchasing program for $10 billion of its stock. That can help inflate the value of a company’s shares by effectively pulling the supply of stock out of the market.
At $488,245 a share, Berkshire shares are unapproachable for most individual investors. That’s why it offers its B-class shares, which have split in the past, for $325.
