Amazon stock to trade at split-adjusted price after the 20-for-1 stock split

Amazon had announced a 20-for-1 split of the Company's common stock. For every 1 Amazon share held, the shareholders will now have 20 shares in their account.

The trading of Amazon stock with split-adjusted price begins 6 June, Monday. On Friday, Amazon stock price closed at $2,447.00 after dropping nearly 2.52 per cent.

When a company splits its stock, it is a positive sign that the company is doing well, says analyst Sawhney.

As Amazon share price becomes more affordable than before, a new set of investors may emerge looking to own the company's stock.

"A stock split usually increases the liquidity of the shares making it accessible to more investors who aren't comfortable buying pricey stocks," he adds.

"There are no immediate ramifications of the Amazon stock split for investors to be concerned about," Sawhney adds.

"A stock split has no effect on a company's valuation, nor does it affect an investor's equity," he explains.

Investors who wish to hold Amazon stock for a long time may be able to take advantage of this opportunity to purchase the stock at a lower price.

"Investors will now predict that if the stock price has to rise in the next days, holding the shares will provide additional gains."

Amazon stock split history shows there have been several stock splits in the past as well.

Amazon went public on May 15, 1997, and the IPO price was $18.00. The company is traded on the Nasdaq under the ticker symbol AMZN.