What if You Invested $1000 in Amazon Stock When It First Hit the Market?

Jeff Bezos

It has been more than 20 years since Amazon had its IPO. As a result, the Amazon of the present is much bigger than the Amazon of the past, which in turn, means that the Amazon shares of the present are worth much more than the Amazon shares of the past. For people who were either fortunate enough or sagacious enough to have participated in Amazon’s IPO, this means that their Amazon shares would be worth a fortune, assuming that they have actually managed to hold onto them this entire time.

For those who are curious, Investopedia has estimated that if someone had invested just $100 into Amazon shares at the IPO share price of $18, they would have Amazon shares with a combined value of $101,197.33 by April 26 of 2018 if they had managed to hold onto them.  Turn that into $1000 and you’ve got over $1 million.  This is a huge increase in value, which serves as a very simple but nonetheless very powerful reminder of how far Amazon has come within a period of 20 years.

How Did Amazon Shareholders Gain So Much Value?

Much of the increase in the value of the Amazon shares comes from the fact that Amazon shares have become a lot more valuable in the present compared to the past. After all, Amazon is now one of the biggest online retailers that can be found in the entire world, which happens to be expanding its operations into new markets in new regions on a constant basis. As a result, the retail titan now earns a lot more revenue from its operations, which in turn, means that an ownership stake in it is now much more valuable.

However, it should be mentioned that part of the increase comes from the stock splits that Amazon carried out in 1998 and 1999. For those who are unfamiliar with the practice, a stock split is when a corporation chooses to split its outstanding shares into more shares. For example, a 2:1 split means that one share becomes two shares, much as how a 3:1 split means that one share becomes three shares. When this happens, the resulting shares have the share price of the initial share split between them in even portions, so if someone had 100 shares at $10 each before a 2:1 split, they would end up with 200 shares at $5 each. Generally speaking, corporations choose to perform stock splits for the purpose of lowering their share price, which has the useful effect of making their shares more liquid because there are more people who can participate in the market for them.

On the whole, Amazon is a remarkable example of how much growth some tech companies have seen in a relatively short period of time. In fact, it is not even the most impressive example of the tech companies that have seen huge successes in the past decade, as shown by the explosive results of Netflix, which managed to make a successful transition from a mail-based rental service to a streaming service. However, it is important to remember that while there are some tech companies that have managed to produce these impressive results, there are a lot of other tech companies that either never managed to make it out of the initial start-up phase or collapsed under their own weight at some point in time.

As a result, it tends to be a bad idea for people to attempt to predict the next Amazon because even the best investors struggle to predict the future with perfect accuracy. For proof, look no further than Warren Buffet, who has lavished praised on Jeff Bezos and Amazon in recent times while stating that he failed to get in on the action because he had no idea that Amazon and other tech stocks possessed so much upward potential.

Due to this, it tends to be a better idea for people who are unsure about what stocks to pick because they are still starting out as investors to choose stock indexes rather than singular stocks. This is because the general direction of the stock market is up, meaning that people who invest in stock indexes should be able to make a respectable profit in the long run because the general direction of the stocks in those stock indexes should make up for the losses of those that fare poorly. Moreover, it is important to note that there are stock indexes consisting of particular kinds of stocks, meaning that interested individuals have plenty of options for benefiting from tech stocks and other intriguing possibilities without actually having to pick out the individual winners.

Add Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Careers CEOs Companies Education Entertainment Legal Politics Science Sports Technology
video games
20 Things You Didn’t Know about Yahaha Studios
UPS
Does UPS Drug Test All Its Employees?
leather
The 10 Best American Leather Companies
Collectibles Credit Cards Investing Real Estate Stocks
Biotech
10 Biotech Stocks That are Solid Long-Term Investments
stock market
Is MGNI Stock a Solid Long Term Investment?
Baltimore Orioles
The 10 Most Expensive Baltimore Orioles Baseball Cards Ever
Aviation Boats Food & Drink Hotels Restaurants Yachts
Christopher Place Resort
20 Awesome Romantic Getaways in Tennessee
Peruse the Stalls at the Puerto de Frutos
The 20 Best Things to Do in Tigre, Argentina
La Croix Sparkling Water
The 10 Best Sparkling Water Brands in the World
BMW Bugatti Cadillac Ferrari Lamborghini Mercedes Porsche Rolls Royce
The Rolls-Royce Cullinan: An Enduring Love Affair
1999 Subaru Legacy Outback Wagon
The 10 Best Station Wagons of the 90s
E85 gas
What is E85 Gas and What is it Used For?
BMW Motorcycles Buell Ducati Harley Davidson Honda Motorcycles Husqvarna Kawasaki KTM Triumph Motorcycles Yamaha
2022 BMW K1600GT
A Closer Look at The 2022 BMW K1600GT
2022 Harley-Davidson Fat Boy 114
A Closer Look at The 2022 Harley-Davidson Fat Boy 114
2022 Bimota KB4
A Closer Look at The 2022 Bimota KB4
Electronics Fashion Health Home Jewelry Pens Sneakers Watches
Chrome Hearts
Why Are Chrome Hearts Jeans So Expensive?
Grand Seiko
A Closer Look at the Grand Seiko SBGN003 9F Quartz GMT
Nike Air Max 95
10 Sneakers that Epitomized 90s Fashion
Jawed Karim
How Jawed Karim Achieved a Net Worth of $160 Million
Renee Zellweger
How Renee Zellweger Achieved a Net Worth of $90 Million
The 10 Richest Crypto Billionaires in the World
Jeffrey Dean Morgan
How Jeffrey Dean Morgan Achieved a Net Worth of $12 Million