An $800 investment in Amazon at IPO would now be worth over $1,000,000

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Amazon is currently priced at $1,861.64 (AMZN), a 120,000% price increase since it’s IPO in 1997. Amazon’s come up is nothing short of remarkable, with the distribution giant reaching $1 Trillion in market cap. The common response to my last article regarding how investing $40k in Tesla would have made you a millionaire, was that $40k was a very unrealistic investment in a company that has come close to bankruptcy many times. Taking that into consideration, I have found a company that would have only required $800 initial investment to turnover millions. 

The brilliance of this is that Amazon’s initial IPO price was $18, meaning that $800 would have only bought you 44 shares initially. However, in the following year’s Amazon went under 3 splits- meaning they wanted to issue more shares and therefore would give holding investors more shares devaluing the share price. The 3 splits lead to a multiplier of 12, meaning after the splits you would know have 528 shares in Amazon. Now, in 2000 the value of your shares was worth around $40,000. Not bad right? At this point many people would have sold at least a portion of their shares as the share price was not likely to climb any higher. Here’s were it becomes a little unrealistic, as human’s we tend to act on emotion and therefore anyone that has made a cool 39k would tend to sell their shares – as we all know things come crashing down at some point.

If you held these shares through the troughs, even to the point where the stock staggered at $65 for many years,  you would now be holding over $1,000,000 in Amazon stock. Amazon in 1997, however was not the most favoured stock and it’s volume didn’t start ascending arguably till 2015 – almost 18 years later.

The moral of the story is that a calculated investment in a company with revolutionary ideas can pay off. Even an entry into Amazon before 2017 would have made you a very nice return. These companies are one offs – however revolutionary ideas should not go un noticed.

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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

Written by Tyger Fitzpatrick, founder of YIG.

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