What happened to Whole Foods stock?
If you'd invested $ 10,000 in Amazon's initial public offering, you'd have that much money now!
No question about it: the words Amazon and e-commerce are now closely linked. In the western hemisphere in particular, there is no more dominant online retailer that is also conquering other strong segments such as the cloud and thus has a very intact history of growth.
The success story behind the Amazon share starts much earlier, of course. But when actually? And what would have happened if you had invested $ 10,000 in the company's rapid growth story? An exciting question that we want to get to the bottom of a little today. Small spoiler: Aside from the Amazon share, there is a lot that we can learn from the price development.The Amazon share since the IPO!
If we jump back to the initial public offering of Amazon shares, we definitely have to jump back in time for some time. The shares of the successful top e-commerce player were launched on the stock exchange in 1997 or, more precisely, on May 15th of this year. The shares have therefore been listed on the stock exchange for over 23 years.
Amazon shares started at an issue price of $ 18 at the time. Anyone who had invested US $ 10,000 in this growth story at the IPO would now be sitting on 555 shares in the e-commerce player. Yes, even a smaller portion for fees would have been left. Exciting. But let's risk the focus on the price of Amazon stock today.
In any case, the Amazon share is currently quoted at a price level of 3,201.65 US dollars (December 18, 2020, decisive for all prices and ratings). The investment of US $ 10,000 at that time would have become US $ 1,776,915.75 to date. Yes: The Amazon share would have made you a millionaire within a period of 23 years. No question about it: That would have left the broad market far behind you.
If we downgrade this performance to each individual year, the average return would be 25.26% per year. Really a great performance that the Amazon share, as an online bookseller at the time, would have made possible for its early investors.A volatile time ...
The Amazon share therefore undeniably looks like a success story. If we look over many years and decades, this can be seen very clearly. Anyone who invested in the initial public offering of Amazon shares would have taken a really volatile performance with them. And, yes, sometimes having to sit out significant losses.
The all-time low when the dot-com bubble burst was 1.32 euros or around 1.50 US dollars. In other words, the price performance has meanwhile been down by 90%. There is no question that many investors would probably have pulled the rip cord here.
Anyone who had accompanied the Amazon share since going public would probably have been strained. Nevertheless, the success of course shows that the shares are right today. We can tell from this that even the biggest winners can look like losers at times.The Amazon share: a strong performance!
No question about it: Anyone who invested US $ 10,000 in Amazon shares at the time of the IPO and had not sold the shares to this day would be rich today. Or at least a millionaire and the online mail order company could have resulted in a life changing investment.
However, the Amazon share was not a direct whiz kid; rather, e-commerce took time to develop. Early, trendy growth stories can therefore be worthwhile. However, they also come at the price of volatility. That is possibly the most important insight that can be derived from the historical performance of Amazon stock.
The post If you'd invested $ 10,000 in Amazon's initial public offering, you'd have that much money now! appeared first on The Motley Fool Germany.
Buffett's mega-billion bets to imitate
Investor legend Warren Buffett invests up to $ 130 billion in just one company. This shows that there is enormous confidence in the future potential.
Buffett has several billion dollar investments in his portfolio. We have analyzed them more closely and looked at to what extent they are suitable for imitation.
You can find out all the details and our tips by requesting our free special report here.
Vincent does not own any of the stocks mentioned. John Mackey, CEO of Amazon subsidiary Whole Foods Market, sits on The Motley Fool's Board of Directors. The Motley Fool owns shares of and recommends Amazon and recommends the following options: Short January 2022 $ 1940 Call on Amazon and Long January 2022 $ 1920 Call on Amazon.
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