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Google Stock – What the Stock Split by Google’s Parent, Alphabet Means
Google Stock – The parent company of Google, Alphabet Inc. GOOG +7.91% said on Feb. 1 that it will enact a 20-for-1 stock split, giving shareholders 19 more shares for each one they currently own.
Over the last two decades, Google stock splits have fallen out of favor. However, Apple Inc., Tesla Inc., and now Alphabet have all revived this practice in an attempt to make their shares more affordable for individual investors.
With its latest quarterly earnings report, Alphabet announced the split, sending shares up 9% in early trading Wednesday.
Must Read: Google Stock Split: Everything You Need to Know about GOOG Shares
What does this mean for investors?
Alphabet shareholders will receive 19 additional shares for every share they hold as of July 1. On July 18, split-adjusted trading will begin.
The split will affect all three classes of Alphabet stock. At Tuesday’s close, if the split were to occur, Class A and Class C shares would trade at roughly $137 apiece, down from about $2,750. Class B shares aren’t traded publicly.
What does this mean for the company?
Alphabet’s shares rose 65% last year, marking its third straight double-digit gain.
Alphabet announced on Feb. 1 that its profit nearly doubled over the previous year. Although expectations that the Federal Reserve would raise interest rates as soon as next month led to a January market decline, which marked the worst month for stocks since the first month of the pandemic. Following four rough weeks of trading, Alphabet has held up better than many, but shares are still down 5%.
Does the split make Alphabet more valuable?
Not at all. A split does not affect the value of an investor’s holdings. Shares with a lower price per share are more plentiful.
What does this mean for the Google stock market?
Generally, Google stock splits don’t have a great deal of impact on the broader market or on share prices over time.
GOOG vs. GOOGL: What’s the Difference?
Alphabet stock has been split into three classes. Investors have been able to purchase Class A common shares since Alphabet went public in 2004. The stock trades under the ticker GOOGL.
Insiders own the company’s Class B stock, which isn’t publicly traded. They hold 10 times as many votes as Class A stockholders do.
GOOG is the ticker for another class of non-voting shares known as Class C. Their price spread is currently less than 25 cents, though at times it has widened to as much as $10 per share.
Has Alphabet split its stock before?
Alphabet split its stock in 2014, giving investors an additional share for every share they owned.
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