Throughout this course, you have been working on your research paper on a company you have chosen. For this assignment, you will consolidate the parts of the assignment you wrote in Units II, V, and V

Amazon

Financial Management

FIN 3301

University

Name

Amazon

Stock Market Exchange

The company I am researching is Amazon, listed on the NASDAQ stock market exchange. I chose Amazon because it is a company my family uses every week, and I am very familiar with it. Amazon is known to be one of the world's most extensive packing, shipping, and storage inventory companies on a global scale. Amazon represents 40% of the US e-commerce market (History of Amazon, 2020). It has also integrated so many diverse types of technology within its company for each hub the company possesses globally. The company focuses on e-commerce, communication through the cloud, digital streaming with Amazon Prime Movie, and AI technology (Bezos, 2020).

The stock activity for Amazon for the past three years has been as follows:

In 2020, the stock started at $1,867.83 and ended at $3,233.90.
In 2019, the stock started at $1,638.00 and ended at $1,867.83.
In 2018, the stock started at $1,169.54 and ended at $1,638.00.

As we can see, the stock has steadily increased over the past three years. This is likely due to the continued growth and success of the company. Amazon has been able to weather the pandemic well and has even seen an uptick in business due to the increased need for online shopping. The company has also diversified its business, moving into food delivery and streaming video areas. This has helped offset any potential losses in other business areas. Overall, the stock activity for Amazon has been positive over the past three years, and investors have been rewarded for their patience.

Stock Split

A stock split is a strategy companies use to increase the liquidity of their shares and boost the price per share. This can be a good move for companies with many shareholders who want to make their shares more affordable. It can also signal to the market that the company's stock is undervalued. Amazon has never initiated a stock split. This may be because the company has never felt the need to do so. The company's stock has always been in high demand, and shareholders have never complained about the price per share (Rincon, 2021).

There are a few reasons why Amazon may not have split its stock. One reason could be that the company wants to signal to the market that its stock is undervalued. If Amazon split its stock, it would send the market a message that it thinks its stock is worth more than it is currently trading for. This could lead to a short-term increase in the stock price, but it would not be a sustainable strategy.

The number of shares of stock outstanding for Amazon is 4,146,100,000. The number of shares of stock authorized for Amazon is 5,000,000,000. The number of shares of stock issued for Amazon is 4,146,100,000.

Another reason Amazon may not have split its stock is that the company does not want to dilute the ownership of its current shareholders. When a company splits its stock, it creates more shares, which means that each shareholder's ownership stake is worth less. This could be a problem for Amazon, which has many institutional investors. These investors might not be happy if their ownership stakes were diluted.

The last reason why Amazon may not have split its stock is that the company does not need to do so to increase the liquidity of its shares. Amazon's shares are already highly liquid, and the company does not need to take any actions to make them more liquid. In conclusion, there are a few reasons why Amazon may not have split its stock.

Shares of Stock

The company may not want to signal to the market that its stock is undervalued, it may not want to dilute the ownership of its current shareholders, and it may not need to take any actions to increase the liquidity of its shares.

My Opinion

I would not invest in Amazon based on what I have evaluated. I do not think the company is as sustainable as it could be. Additionally, I believe that other companies are more innovative and that I would instead invest my money in.

Comparison of the Company’s Stock

Amazon's stock is doing better than most other companies in its industry. Its stock has been up about 9% in the past year, while the industry average is down about 3%. Amazon is also one of the most active stocks in its industry, with an average of about 5 million shares traded per day.

References

Bezos, J. (2020). Amazon Annual Report. Retrieved June 14, 2022, from https://www.annualreports.com/HostedData/AnnualReportArchive/a/NASDAQ_AMZN_2020.pdf.

Rincon, P. (2021, July 20). Jeff Bezos launches to space aboard New Shepard Rocket Ship. BBC News. Retrieved June 14, 2022, from https://www.bbc.com/news/science-environment-57849364