Amazon.com Inc said on Wednesday its board approved a 20-for-1 split of the e-commerce giant’s common stock and authorised a $10 billion buyback plan, sending the company’s shares up 7 per cent in extended trading.

This is the first stock split by Amazon since 1999 and will give investors 19 additional shares for every share they hold. Trading based on the new share price will begin on June 6.

Amazon’s share split is similar to the one announced by Google parent Alphabet Inc last month. Several mega cap companies such as Apple, Tesla and Nvidia have split their stocks since 2020.

Amazon shares were up 5.4 per cent to $2,936.99 in early trading on Thursday. The stock, which closed at $2,785.58 on Wednesday, has nearly doubled over the last two years, when demand for both its e-commerce and cloud computing business surged in the wake of the Covid-19 pandemic.

“This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company,” an Amazon spokesperson said.

The stock buyback replaces the previous $5 billion stock repurchase authorised by Amazon’s board in 2016, under which the company had repurchased $2.12 billion of its shares.

After shares declined about 16 per cent amid a tech rout this year, the company's market capitalisation stood at roughly $1.4 trillion as of last close.

“Amazon’s management is looking to instill fresh confidence,” AJ Bell Investment director Russ Mould said.