Amazon splits its shares
And more of the week's best financial insight
Here are three of the week's top pieces of financial insight, gathered from around the web:
Amazon splits its shares
Amazon announced plans for its first stock split since 1999, said Nicolas Vega at CNBC. Just a month after Google parent Alphabet said it would do a 20-for-1 split of its shares, the ecommerce giant said existing shareholders will get 19 additional shares from each share they already own. The split would bring the price of each Amazon share down from roughly $2,785 (where it stands today) to $139, making the stock more affordable. Though it would not change Amazon's market cap, it could "get the stock into the Dow Jones industrial average," which excludes stocks with very high per-share prices. Current owners of Amazon's stock will receive their additional shares on June 3.
Black applicants not welcome
Wells Fargo rejected more mortgage-refinancing applications from Black homeowners than it accepted in 2020, said Shawn Donnan in Bloomberg Businessweek. As mortgage rates plummeted and homeowners scrambled to refinance existing loans, 72 percent of white homeowners who completed an application with Wells Fargo were approved, compared with just 47 percent of Black homeowners. "While Black applicants had lower approval rates than white ones at all major lenders," according to federal mortgage data, "Wells Fargo had the biggest disparity" and was alone in approving fewer than half the applicants. That figure doesn't include the "27 percent of Black borrowers who began an application with Wells Fargo" and withdrew it.
New rules for inherited IRAs
The IRS released notable guidance for heirs of some tax-sheltered retirement vehicles, said Laura Saunders in The Wall Street Journal. The new rules "fill in the details of the Secure Act, a law Congress passed in 2019 that revised rules for retirement plans." Heirs of traditional individual retirement accounts (IRAs), Roth IRAs, and similar accounts whose owners died after 2019 now have 10 years to empty those accounts. Until now, it was assumed that heirs could wait until the end of the 10-year period to take out money. Under new IRS rules, however, if the owner died after hitting the "required beginning date for payouts," which is April 1 after the year in which the IRA owner turned 72, then the heirs must take annual withdrawals based on the life expectancy of the owner. That's not the case for Roth IRA heirs, who can wait until the end of the 10-year period to drain the accounts.
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