Amazon's IPO to Present: The Unbelievable Story of Share Multiplication

Imagine investing just $18 in a single share of Amazon in its IPO back in 1997. Little did you know that this seemingly small investment would turn into a financial powerhouse over the next quarter of a century. Thanks to Amazon's strategic acquisitions, expansion into new sectors, and customer loyalty, that one share has multiplied into an astronomical figure. Let's explore how Amazon's growth has transformed your investment into a shareholder's dream.



Amazon's strategic acquisitions have played a pivotal role in its growth. The purchase of Whole Foods Market in 2017 expanded Amazon's physical presence, enabling it to offer grocery delivery services and integrate Whole Foods products into its online marketplace. This acquisition enhanced Amazon's value proposition, attracting more Prime members and boosting its stock price. Additionally, the acquisition of Zappos in 2009 helped Amazon diversify its product offerings and benefit from Zappos' strong customer service culture.

Amazon's expansion into cloud computing with Amazon Web Services (AWS) and digital streaming has also significantly boosted its stock performance. AWS accounted for an estimated 31% of worldwide cloud-service spending in Q2 2022, demonstrating Amazon's dominance in the cloud infrastructure-services segment. Amazon Prime's net sales grew from $29 billion in 2013 to $31.77 billion in 2021, with 168.3 million subscribers projected by 2025.



Amazon's ability to reinvest profits into growing its business has also contributed to its share growth. Since its IPO in 1997, Amazon has undergone four stock splits, the most recent being a 20-for-1 split in 2022. If you had bought 1 share at the IPO, you would now own approximately 133,200 shares, assuming you held onto them through all the splits. This highlights Amazon's dilutive nature and the power of long-term investing.

Customer loyalty and the success of Amazon Prime have further fueled Amazon's stock growth. Launched in 2005, Prime offers unlimited two-day shipping for a yearly fee. As of 2021, Prime had 150 million paid subscribers in the US alone, with Prime members spending on average $1,400 per year, compared to $600 for non-Prime members. This customer loyalty has driven Amazon's revenue and solidified its market position.

In conclusion, if you had bought 1 share of Amazon at its IPO in 1997, you would now own approximately 133,200 shares, given Amazon's stock price of around $123.53 as of May 2022. This incredible share multiplication story is a testament to Amazon's strategic acquisitions, expansion into new sectors, reinvestment of profits, and customer loyalty. Amazon's growth over the past quarter of a century has transformed a small investment into a significant shareholding, demonstrating the power of long-term investing and strategic decision-making.