You read that correctly… you could buy a $1,000 stock for $100, and I want to show you how that’s possible.
Imagine selling the Amazon stock you bought for $100 for $1,000. That’d be a $100,000 payout if you bought a hundred shares.
I don’t know anyone in their right mind who’d pass this up.
Before I tell you how it could be possible to buy Amazon (AMZN) for $100, I want to congratulate you if you took our Chief Editor Sean Bower’s advice back on May 2nd.
You remember what he told you?
“Buying 100 shares of Amazon as it races to $1,000 would see you gain $5,648.”
That was sent to you on May 2nd, about a month ago, when Amazon was priced at $943.
We finally saw Amazon hit the $1,000 mark for the first time on Tuesday, and now you’re going to find out how you could buy it for $100.
It’s not every day you get to see a stock hit the iconic $1,000 milestone. In fact, there’s only one other stock in the S+P 500 that’s in the quadruple digits—Priceline (PCLN), which is sitting around $1,850.
With this impressive feat, Amazon has reached a staggering market value of $478 billion.
The only U.S. companies that this evaluation doesn’t top are Apple (AAPL), Google (GOOGL), and Microsoft (MSFT)—two of which (Apple and Microsoft) are featured in the iconic Dow Jones ($INDU).
If you’re not too familiar with the Dow Jones, it’s an index that is revered as a benchmark for the U.S. stock market. It might come as a surprise to you that Amazon is not in the Dow Jones.
But that doesn’t mean that it won’t be in the near future.
The Dow’s 30 stocks occasionally change as newcomers top U.S. markets.
Since the Dow Jones is price-weighted, the most expensive stock it comprises is Goldman Sachs (GS) at around $220.
If Amazon had any fighting chance of becoming a Dow stock, it’d have to execute a stock split.
A stock split is where a company expands their number of shares so that the price of the stock becomes cheaper.
For example, in 2015, when Apple was added to the Dow, it had just undergone a 7 for 1 stock split—meaning that the number of Apple shares increased by 7 times and its price went from $650 to about $92 (650 divided into 7).
Stock splits are a commonality among companies who see their share prices reach hundreds of dollars.
If Amazon were to execute a 10 for 1 split, the amount of Amazon shares would increase 10 times and its stock price come down to $100.
And that’s where you’d be able to buy Amazon for $100. It won’t remain that cheap for too long, though.
When a company partakes in a stock split, the stock becomes more affordable and desirable to investors, which is why it’s so common to see a stock rise immediately after a split.
It only took Apple 3 months to gain 25% after its stock split in 2015, and it’s now up over 65%.
Keep an eye on the news coming from the Amazon camp. If you hear anything about it joining the Dow Jones, you could get the chance to buy the tech giant for $100 and that’d certainly mean there’s massive profits lurking ahead.
