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Amazon Jumps on Plan to Split Stock, Buy Back Up to $10 Billion

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(Bloomberg) — Amazon.com Inc. is planning to split its stock for the first time in more than two decades in a move that will end an era of four-digit stock prices for the biggest U.S. technology companies.

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Amazon intends to boost its outstanding shares by a 20-to-1 ratio, under a plan disclosed late Wednesday, joining other technology giants like Alphabet Inc. and Apple Inc. who have turned to splits to make their stocks more attractive to retail investors. That news combined with a $10 billion share-buyback authorization sent Amazon shares up as much as 11% in New York postmarket trading.

As Amazon’s stock price has ballooned over the years, a potential split has been a frequent subject of speculation, which was only heightened by Alphabet’s proposed 20-for-1 split disclosed last month. Amazon conducted three splits in the 2 1/2 years following its 1997 initial public offering and then halted the practice. The topic occasionally came up at Amazon shareholder meetings but the company hadn’t taken action until now.

The e-commerce giant, in an emailed statement, said the split is aimed at giving employees “more flexibility in how they manage their equity” as well as making the stock “more accessible” for average investors. Amazon’s split, like Alphabet’s, requires shareholder approval and would take effect in June if cleared.

Amazon is learning from Apple how a slower-growing technology company can still be a popular investment, said Tom Forte, an analyst with DA Davidson & Co.

“The stock split is kind of an old school strategy to lower your share price to stimulate interest among retail investors,” Forte said. “The stock buyback tells investors they have plenty of money sitting around and aren’t planning a big investment on building new warehouses.”

Alphabet and Amazon are the last two of the five biggest U.S. technology companies by revenue that have four-digit stock prices. Amazon shares closed at $2,785.58 on Wednesday, up more than 4,000% since its last stock split in September 1999.

Read more: Alphabet Plans Rare 20-for-1 Stock Split to Lure Retail Traders

Share splits had almost disappeared from U.S. stock markets recently, with only two in 2019 compared with 47 splits in the S&P 500 in 2006 and 2007, according to Bloomberg-compiled data. But Apple and Tesla Inc. have helped revive the practice after splitting their stocks in 2020.

A lower stock price makes it easier for mom-and-pop traders to buy shares rather than purchase fractional stocks through their brokerage firms. It may also pave the way for inclusion in indexes such as the Dow Jones Industrial Average — which is weighted by companies’ stock price and not by its market capitalization. Amazon shares have fallen 16% this year amid a broad selloff in technology stocks as the Federal Reserve prepares to raise interest rates.

Michael Pachter, an analyst at Wedbush Securities Inc., said the stock split is also most likely part of broader compensation changes underway at Amazon since workers feel less slighted if they receive an entire share of stock rather than a fraction of a share.

“Stocks that trade for $100 or less have a bigger base of retail investors, but I don’t think that’s why Amazon is doing this,” Pachter said. “It means absolutely nothing except that Grandpa can buy little Johnny a share of Amazon stock.”

(Updated with context, starting in the third paragraph. Adds company and analyst’s comments throughout.)

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

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After pandemic drop, Canada’s detention of immigrants rises again By Reuters

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© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

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Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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