Amazon’s Stock Turns 20—What Lessons Can Investors Learn?

Amazon.com went public 20 years ago today. There was so much demand for Jeff Bezos’s “online bookstore,” as it was then referred to, that the underwriters raised the offering price twice. They settled on $18 per share.

There was some concern whether an online bookseller could truly compete with industry stalwarts such as Barnes & Noble and Borders. Would people really buy books on the Internet? The idea seemed farcical. But two decades later, Amazon has done pretty well for itself.

On Friday, the shares closed at $961.35. And that doesn’t include three stock splits totaling 12-for-1. In 1997 terms, one share of Amazon is currently worth $11,536.20.
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In simpler terms, the stock has vaulted 640.9-fold in 20 years. If you had invested $16,000 in Mr. Bezos’s little project, you would now be sitting on a cool $10 million. On average, Amazon’s stock has gained roughly one percent every 11 days for 20 straight years. What’s even more remarkable is that that figure includes the bursting of the tech bubble, when Amazon’s stock plunged 95 percent.

Read the rest at The Observer

Posted by on May 15th, 2017 at 12:07 pm


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