Everyone remembers their first. The first time I ever used Amazon was in 1996, when I convinced my dad to buy a book. I’m pretty sure it was Gary Paulsen’s The Hatchet because you could never find a copy at our mall’s local Walden Books. Books were the only thing you could get on Amazon and it was quite a feat to convincing him that putting your credit card on a website was totally safe in 1996.
Fast-forward 20 years: We’re both Amazon Prime members. I can’t imagine my life without buying *something* on it a couple times a week. The company has me and millions of customers as a loyal customer, hook, line, and sinker.
Jeff Bezos’s Amazon empire has transformed the entire retail sector of the global economy. The company is worth a massive $339.32 billion, ranking as one seventh biggest company in the world in terms of market cap.
When Amazon IPOed on May 16, 1997, it hit the public markets at $18.00 per share. 19 years later, it’s up 20,000%, soaring to a record high of over $721 a share today.
So what if you had a crystal ball back in 1997 and purchased a meager $5,000 of Amazon stock, then forgot about it for 19 years? How much would it be worth?
Get ready to have some regrets: Over two million dollars.
In the years after the company went public, the stock split three times. This means that one share purchased at the IPO price in 1997 turned into 12 shares by the year 2000. Here’s the split history, via:
Amazon.com (AMZN) has 3 splits in our Amazon.com stock split history database. The first split for AMZN took place on June 02, 1998. This was a 2 for 1 split, meaning for each share of AMZN owned pre-split, the shareholder now owned 2 shares. For example, a 1000 share position pre-split, became a 2000 share position following the split. AMZN’s second split took place on January 05, 1999. This was a 3 for 1 split, meaning for each share of AMZN owned pre-split, the shareholder now owned 3 shares. For example, a 2000 share position pre-split, became a 6000 share position following the split. AMZN’s third split took place on September 02, 1999. This was a 2 for 1 split, meaning for each share of AMZN owned pre-split, the shareholder now owned 2 shares. For example, a 6000 share position pre-split, became a 12000 share position following the split.
A little math. $5,000/18 = 277 shares. 277 x 2 = 554 x 3 = 1662 x 2 (or, simply 277 x 12) = 3324 shares x today’s $721 price per share = $2,396,604.
Holy shit, you’re so rich. IF ONLY you put a $5,000 chip on Amazon and were cool with just letting it sit for all those years.
Here’s another hypothetical. What if you bought $5,000 of Amazon stock just four months ago on February 9th, when Amazon’s stock buyback program (hello, liquidity!) caused it to go to a bargain $478.01 a share? Some math:
$5,000/478.01 = 10.46 (so let’s make it 10 because you can’t buy half shares). 10 x 721 = $7210. In four months of just letting the markets do it’s thing, you made an easy $2429.90.
No wonder Jeff Bezos is worth over $62 billion.