Amazon (AMZN 1.67%) has been one of the best-performing technology stocks of all time. It went public in 1997 at a price of $18 per share and currently trades for about $255, as of this writing.
However, that doesn't even come close to telling the story of just how well Amazon has done. In addition to the rise in stock price, Amazon has split its shares several times throughout its history.
Here's how many shares a single share in the IPO would be now, and how well your investment would have performed from 1997 until today.
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Amazon's stock split history
Over its publicly traded history, Amazon has split its stock a total of four times. Three of these were during its early years while the dot-com boom was still going on, and one was more recent. But here are the details of all four:
- Amazon completed a 2-for-1 split in June 1998.
- The company split the stock again at a 3-for-1 ratio in January 1999.
- The final dot-com era stock split was completed in September 1999 and was a 2-for-1 split.
- Following the pandemic-fueled surge in e-commerce demand, Amazon completed a 20-for-1 stock split in June 2022.
NASDAQ: AMZN
Key Data Points
Here's how it would have progressed over time. Your original share would have become two after the first split. In January 1999, those two shares would have become six, and then would have split again into 12 shares later that same year. Finally, the 20-for-1 split would have turned those 12 shares into 240.
So, the short answer is that if you bought one share of Amazon at its IPO, you'd own 240 shares today, roughly 28 years later.
Of course, most investors didn't just buy one share -- especially back then. In the 1990s, it was still quite common to pay hefty stock trading commissions, so it was generally impractical to place small orders. But to see how many shares you'd have if you had bought any number of shares of Amazon at the time of the IPO, simply multiply by 240.
How would your investment have performed?
To buy one share of Amazon at the time of its IPO, you would have paid $18. This is in addition to whatever commission your broker charged at the time -- after all, in the 1990s, commission-free trading wasn't yet available anywhere.
However, just based on the IPO price, you would have paid $18.
As mentioned, Amazon shares trade for about $255 today. But because you'd own 240 shares after its four stock splits, your investment would be worth $61,200 -- from an $18 investment.
That translates to a 3,400x return. Since Amazon has been public for about 28-and-a-half years, this represents an annualized return of approximately 33%.
Is Amazon still a good stock to buy now?
To be perfectly clear, it would be unrealistic to expect Amazon's stock performance over the next 28 years to look anything like the first 28. The business has simply become too large to produce a 3,400x return from here. After all, at the time of its IPO, Amazon was a small company that sold books online.
However, there's still a lot to like about Amazon from a long-term perspective. Its management is doing a great job of improving efficiency and profitability. The AWS cloud services business continues to grow rapidly and just signed a lucrative deal with OpenAI. And the core e-commerce platform still has quite a bit of potential, as the majority of U.S. retail sales are still not conducted online.
