Business

Google Stock Split: Everything You Need to Know about GOOG Shares

Published

2 years ago

February 2, 2022

Google Stock is Splitting – As of this writing, Alphabet, Google’s parent company, has announced its Q4 results, which has caused its stock to soar over 10% in pre-market trading. The price jump could be attributed to the fact that Q4 sales were up 32% year-over-year to $72.3 billion, according to Barrons.

A second reason for the jump in price may have to do with an announcement Google made: It’s splitting its stock. What does the stock split mean for investors, and why is Google splitting its stock? Here’s what you need to know.

Must Read: Panic Alert! Dow Jones Drops 500 Points As Bitcoin Plummets

What’s a Google stock split?

When a company decides to split its shares by a certain factor, such as 2-to-1, it is called a stock split. The result is that new shares are created. For example, if a stock splits 2-for-1, that means there are now twice as many shares as there were before the split: If there were 15 million shares of stock and it splits 2-for-1, there are now 30 million shares.

What is Google’s stock split by?

The amount is enormous. Google has announced a 20-to-1 stock split. This means there will be 20 times as many GOOG shares available after the split as there are today.

If Google Stocks splits in a 20-to-1 ratio, will shareholders own 20 times as many shares after the split?

Yes, that’s correct. After the stock splits 20-to-1, if you own 1,000 shares of GOOG today, you’ll own 20,000 shares after the split.

Does the 20-to-1 Google stock split mean my GOOG shares will increase 20 times in value?

Unfortunately, no. The second result of a stock split (besides having more shares) is that those shares are now worthless proportionately. In other words, the value of a stock split 2-for-1 is now half of what it was before. The split of GOOG shares will result in each share being worth 20 times less than it was before.

After the Google Stock Split, my shares will be worthless?

Although you will have 20 times the number of shares after the split, your total GOOG shares value will remain the same.

What is the value of Google (Alphabet) after the Google stock split?

Not at all. After the split, there will be 20 times more shares of the company, but each share will be worth 20 times less, meaning the company’s market cap will remain the same.

What’s the point of splitting the stock?

According to Ruth Porat (via Bloomberg), the company’s chief financial officer, the split will make its shares more accessible. As a result, GOOG’s stock will be more accessible to retail investors like us. The stock is currently trading at around $3,000 per share, making it hard for retail investors to buy a single share. After the split, however (if GOOG stock were to remain at $3,000 per share right before the split), one share of GOOG would only cost $150 per share, making it much more affordable to retail investors.

GOOG shares split when?

In accordance with The Wall Street Journal, shareholders of record on July 1, 2022, will receive an additional 19 shares for each share they own on Friday, July 15. On Monday, July 18, the stock will begin trading at its split-adjusted price.