Corporate Actions: A Case of Walmart and Amazon

Case Code: FINC214
Case Length: 8 Pages
Period: 1962- 2024
Pub Date: 2024
Teaching Note: Available

Price: Rs.200
Organization: Walmart Inc.
Industry: Retailing
Countries: United States
Themes: Corporate Finance

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Expert Opinion

According to some experts, a stock split helps companies to attract more investors. Dave Heger, senior equity analyst at Edward Jones, commented, “The split may trigger renewed investor interest, potentially attracting more retail shareholders into the stock who might view it as more attainable to buy.” Gaurav Dua, Head - Capital Market Strategy at Sharekhan by BNP Paribas, added, “A company goes for the buyback of shares if the board feels that the stock is undervalued or, in some cases, the company does not have any productive use of the free cash on its books and would prefer to return it and reward the shareholders through buyback of shares rather than dividend payouts.”..

Looking Ahead

After going in for successful share repurchases and stock splits in 2023, Walmart also had plans to make further share repurchases and distribute dividends to its shareholders. After the stock split, the company’s outstanding common shares grew from 2.7 billion to approximately 8.1 billion. However, its dividend per share dropped by two-thirds. As an impact of the split, in fiscal 2025, shareholders would receive 83 cents per share compared to US$ 2.49 before the split..

Exhibits

Exhibit I: Walmart’s Revenue Growth from 2002 - 2023
Exhibit II: Walmart’s FCF Trend From 2002-2023
Exhibit III: Walmart’s Net Common Equity Issued/Repurchased History
Exhibit IV: Walmart’s Dividend per Share (in US$) Trend (From 2002-2023)
Exhibit V: Walmart’s Stock Split History
Exhibit VI: Amazon’s Revenue growth and FCF trend
Exhibit VII: Amazon’s Stock Split and Share Repurchase History

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