The Wealth Generated by Amazon's IPO: A Look at Shares Today

Amazon (AMZN) has become a powerhouse in the stock market over nearly 30 years. If you were fortunate enough to purchase one share during its initial public offering (IPO), you would currently own significantly more shares and have increased your wealth considerably. Amazon's latest stock split occurred in 2022, yet this is not its only one; the company has made several stock splits since going public.

Gains Through Holding

Since its launch in 1997, Amazon has split its stock four times. Each split allowed investors to have more shares while simultaneously reducing the price of each share. The initial splits occurred quickly due to Amazon's explosive growth, resulting in rising share prices. The first split took place in March 1998 as a 2-for-1 split, followed by a 3-for-1 split in November 1998 and another 2-for-1 split in 1999. After 23 years without further splits, Amazon's share price rose dramatically, leading to a 20-for-1 split in 2022.

At its IPO, Amazon stock was priced at $18 per share. Adjusted for splits, the effective price of that initial share is about $0.075. If you had purchased one share during the IPO, you would now own 240 shares. Today, these shares would be valued at approximately $47,280.

Although owning just one initial share might not enable immediate retirement, most investors typically do not buy just one share. For example, if you invested $100 on the first day of trading, you would now possess shares worth over $200,000. Although this might not be sufficient for retirement, it certainly provides a substantial financial return.

While Amazon stock has experienced its share of ups and downs over the years, it illustrates how strategic purchasing and holding of shares in trusted companies lead to wealth accumulation over the long term. Although the meteoric gains of the early days may not be replicated now, investing in Amazon today offers a combo of growth alongside reduced risk.

Amazon, Stock, Investment