If You’d Invested $1,000 in Amazon Stock 27 Years Ago, Here’s How Much You’d Have Today

When it comes to growth potential over time, few stocks have matched it Amazon (AMZN -1.40%). The e-commerce pioneer has evolved from an online bookseller to a conglomerate that leads in multiple retail and technology niches.

In hindsight, if one had the patience to wait and the courage to weather the massive declines, a $1,000 investment in the company’s initial public offering (IPO) would have paid dividends for shareholders.

The rise of Amazon

A $1,000 investment at the closing price on the day of the IPO and not sold would be worth about $1.87 million today. The stock debuted on May 15, 1997, at a pre-split closing price of $23.50 per share ($0.098 per share adjusted for the split). Assuming fractional shares could be bought, the 42.55 shares bought that day would have grown to 10,212 shares worth $182.69 each as of this writing.

Those who have held the stock for its entire 27-year history have not been on a predictable or easy path.

Investors might have anticipated that Amazon would venture beyond selling books, it was almost impossible to predict the huge variety of products it would sell, or that it would lead the cloud computing industry through Amazon Web Services (AWS). This is critical because AWS generates the majority of operating revenue.

Investors also suffered a brutal sell-off during the dot-com bust. Between 1999 and 2001, Amazon’s stock fell as much as 95% and did not return to its 1999 to 2009 high.

For a while, this decline made it look more like many of the failed online retailers of the time. Therefore, investors should have had strong faith in founder Jeff Bezos’ vision to hold on to the stock during that time.

Ultimately, Amazon’s stock history underscores both the rewards and pitfalls of IPO investing. While the potential returns can be massive, it usually takes vision, analytical skills, discipline and a high tolerance for pain to identify such investments early and allow them to develop to their full potential.