Key takeaways
- Amazon is set to replace Walgreens in the Dow Jones Industrial Average starting next Monday.
- This change was prompted by Walmart’s 3-for-1 stock split, also scheduled for next week, reflecting “the evolving nature of the American economy,” according to S&P.
- Concurrently, Amazon founder Jeff Bezos has been selling billions of dollars worth of stock in recent weeks, adding an intriguing element to Amazon’s inclusion in the Dow Jones Industrial Average and potentially influencing investor perceptions of the company.
Amazon.com Inc. (AMZN) experienced a 1% rise in early trading on Wednesday following the announcement that it will join the Dow Jones Industrial Average, replacing Walgreens Boots Alliance (WBA).
The changes are scheduled to take effect next Monday, as confirmed by S&P Dow Jones Indices, the entity responsible for managing the 30-stock benchmark.
S&P attributed the decision to replace Walgreens with Amazon to Walmart’s forthcoming 3-for-1 stock split, which is also slated for next week. The rationale behind the change reflects “the evolving nature of the American economy.”
The Dow Jones Industrial Average, a widely tracked index by individual investors, has traditionally been dominated by legacy industrial companies. However, the addition of Amazon will bolster the index’s representation of tech stocks.
Amazon, which has grown into one of the world’s largest online retailers since its humble beginnings as an online seller of books in 1995, has seen remarkable success over the years. However, its founder, former chief executive, and the world’s third-richest individual, Jeff Bezos, has recently been offloading Amazon stock. Bezos has sold over 14 million shares of his company, totaling approximately $2.4 billion, with the total number of shares sold since the beginning of the month reaching 50 million.
Despite Bezos’s sell-off, Amazon’s stock has performed well, rising by more than 11% this year. In contrast, Walgreens shares experienced a decline of 3% in early trading on Wednesday and have fallen by 16% since the beginning of the year.