What the stock split by Google parent Alphabet means
Alphabet Inc., parent company of Google.
said on Feb. 1 that it would adopt a 20-to-1 stock split, giving shareholders an additional 19 shares for each one they hold.
Stock splits had fallen out of favor over the past two decades. But since the Apple pandemic Inc.,
You’re here Inc.
and now Alphabet has revived the practice in a bid to make their stock more affordable for individual investors.
Alphabet announced the split with its latest quarterly results, which sent shares up 9% in early trading on Wednesday.
What does this mean for investors?
Alphabet shareholders beginning July 1 will receive an additional 19 shares on July 15 for each share they own. Trading will begin on an allocation-adjusted basis on July 18.
The split will cover all three classes of Alphabet shares. If the split took place at Tuesday’s close, Class A and Class C shares would trade at around $137 each, down from around $2,750 at Tuesday’s close. Class B shares are not listed on a stock exchange.
What does this mean for the business?
Alphabet shares rose 65% last year, a third consecutive double-digit annual gain.
On February 1, Alphabet said it had nearly doubled its profits from 2021. But expectations that the Federal Reserve will raise interest rates as early as next month led to a January market decline that marked the worst month ever. for stocks since the first month of the pandemic. Alphabet has held up better than many, but shares are still down 5% after four tough weeks of trading.
Does the split make Alphabet more valuable?
No. Splits do not affect the value of an investor’s holdings. A lower price per share corresponds to a higher number of shares.
What does this mean for the stock market?
Stock splits don’t tend to have a significant impact on stock prices over time, nor do they tend to have much effect on the broader market.
GOOG vs. GOOGL: what’s the difference?
The split applies to all three classes of Alphabet shares. Class A common shares have been available to investors since Alphabet’s IPO in 2004. They currently trade under the ticker symbol GOOGL.
Class B shares of the company are held by insiders of the company and these shares are not publicly traded. They hold 10 times the voting rights of Class A shares.
Another class of non-voting shares known as Class C trades under the symbol GOOG. They trade largely in line with common stocks – the spread between the two is currently less than 25 cents – although at times the spread has widened to as high as $10 per share.
Has Alphabet ever split its shares?
Alphabet last split its shares in 2014, giving investors one additional share for every share they owned.
what to know about recent stock splits
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