Google parent Alphabet announces 20-for-1 stock split

Shares of Alphabet stock have become more expensive lately, at over $2,750 each at the time of market close on Tuesday, having doubled in price since May 2020. The lower price would mean that more investors might be able to afford buying entire, rather than fractional, shares of the advertising company. For example, a shareholder might own 10 shares worth $100 each in a company.

Liquidity means the ease with which investors can buy or sell shares on a stock exchange. The smaller the dollar amount of each share, the smaller the number of dollars needed by even the smallest investor to buy or sell that stock. The fundamentals of the company and the stock price have not changed. Sticking with the dark chocolate bar analogy, after breaking the bark into smaller bits, you have smaller bits of dark chocolate, not more chocolate overall. Page and Brin own a combined 12% of Alphabet’s Class C shares, which trade under the ticker symbol “GOOG” and have no voting rights, according to FactSet. The duo control 83% of the company’s Class B shares, which do not trade on open markets.

The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. As for the finer details, the Google stock split date is set for July 15, according to the company. In order to participate in the split, one must own GOOG or GOOGL stock on July 1. GOOG and GOOGL will be undergoing a huge 20-to-1 stock split with this upcoming event. This means for every one share of GOOG or GOOGL stock one owns, they will receive another 19 shares on July 15.

1. The stellar numbers come as the company announces significant jumps in revenue across its advertising and cloud service arms.
2. While investors cheered the stock split news earlier in the year, concerns about macroeconomic headwinds have pushed GOOGL and GOOG shares to a two-year low in early November 2022.
3. GOOG and GOOGL represent the company’s Class C and Class A shares, respectively.
4. Similarly, in a stock split, it is very important to remember that the price of the share also is reduced.

There will be a commensurate decline in the share price post-split. For each share of Alphabet stock an investor owns — currently trading near $2, post-split, they’ll own 20 shares worth approximately $114 each. The total value of the investment will be the same immediately following the stock split. When the company announced its fourth-quarter earnings back in February, Alphabet said that its board of directors had approved the 20-for-1 split, which would be paid in the form of a special stock dividend. This means shareholders would be awarded additional shares of stock.

For Alphabet, these splits present investors with more accessible GOOG and GOOGL stocks. The split won’t affect Morningstar senior equity analyst Ali Mogharabi’s view on the company, which he values at $3,600 per share. After the split, the company’s fair value estimate will be adjusted to $180 per share to accommodate for the 20-fold increase in the company’s outstanding share count. For the second time in its history Google’s parent company, Alphabet GOOGL GOOG, is set to split its stock. The market capitalization sometimes referred as Marketcap, is the value of a publicly listed company.In most cases it can be easily calculated by multiplying the share price with the amount of outstanding shares. It should be mentioned that the higher share price of company A versus company B does not mean that A is more valuable than B.

The parent company of Google said this week that its board of directors had approved a 20-for-1 stock split. This will take place in the form of a special dividend, which will be subject to shareholder approval. Assuming Alphabet investors approve the measure, shareholders of record as of Jul. 1, 2022, will receive an additional 19 shares of stock for each share they own after the close of business on July 15. For instance, if you own 10 shares of Company X at $10 per share, and the company announces a one-for-two reverse stock split, you end up owning five shares of Company X at $20 per share. Usually, reverse stock splits are announced by companies that have low share prices and want to increase them – oftentimes to avoid being delisted.

To view this article, become a Morningstar Basic member.

The current stock price won’t have any impact on the stock split, however. Alphabet shareholders approved the measure this week at the annual shareholder meeting, which paves the way for the next steps. Shareholders on record as of July 1, 2022 will receive 19 additional shares of Alphabet stock for every one share they own after the market close on July 15.

What is noticeable is the trading volume of the stock which might be attributed to news flow. Alphabet generated revenue of $75.3 billion, an increase of 32% year over year. Perhaps even velocity trade more impressive was that revenue for the full year jumped 41%. At the same time, Alphabet’s quarterly operating margin ticked higher to 29%, up from 28% in the year-ago quarter.

Alphabet Shareholders Approve 20-for-1 Stock Split. Here’s What Investors Need to Know.

But additional participation by smaller investors could also lead to the price increasing, which we saw in the prices of both Apple and Tesla immediately after the stock split announcement. While the stock split in xm group and of itself doesn’t signal that Alphabet stock is a buy, there are plenty of other reasons to invest in the search giant. Investors need to look no further than the company’s blockbuster fourth-quarter report.

This is especially true now with more and more investors having access to low-cost trading platforms. Buying and selling stocks is now easier than ever, and for many investors, these recent splits might be an entry point for companies they have long admired. The information contained plus500 review within is for educational and informational purposes ONLY. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person’s sole basis for making an investment decision.

Does that mean a stock split is a good thing?

With sales of $137 billion, a profit of $30.7 billion and a market value of $ 863.2 billion, Alphabet Inc. ranks 17th among the world’s largest companies according to Forbes Global 2000 (as of 4th November 2019). In 2019, Alphabet had annual sales of $161.9 billion and an annual profit of $34.3 billion. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in. Alphabet’s 92.2% market share in the global search engine market, its growing presence in the mobile search sector, and its 29 cloud regions and 88 availability zones worldwide were cited as other positives. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.

Stock split list

Those owing 10 shares will receive 190 additional shares after the stock split — and so on. Shareholders won’t need to do anything to take part in the split, as it will all be handled by their brokerages. This split is meant to drastically reduce the price of both GOOG and GOOGL; right now, the two stocks trade at over $3,000 apiece. The 20-to-1 split will ultimately reduce share prices to a much more palatable $140.