Google Stock Split Is Approved: What’s The Stock Outlook? NASDAQ:GOOG

He mainly covers digital assets and tech stocks, with a focus on crypto regulation and DeFi. GOOG and GOOGL stocks have been in high demand for over two decades at this point. And of course, the values of these stocks have been pushed sky-high as a result. Stock splits are a great way to make stocks more affordable for investors, and that’s exactly what is driving Alphabet to conduct its splits. Analysts have also speculated that the move could get Alphabet’s stock into the Dow Jones Industrial Average, which it is not currently a part of due to its high price.

Shares in Google’s parent company Alphabet have shot up more than 230% in the last five years, to stand at $2,752.88 on Tuesday. Alphabet was built on the back of Google’s search dominance, as the company controls roughly 92% of the worldwide search market. This, in turn, fuels the company’s industry-leading 28% of the global digital advertising market.

  1. GOOGL stock jumped over 7% one day after the announcement of its stock split on 2 February 2022.
  2. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.
  3. With the net cash position now at over $100 billion, there is no need to continue hoarding cash – and management finally seems to understand this.
  4. Though the new price will be roughly $150 per share — as of Alphabet’s Wednesday closing price of $2,960 — existing shareholders will receive 19 additional shares for every share they already own.
  5. Earnings are often misunderstood at GOOGL due to their large investment portfolio.
  6. Read on for a quick refresher course on the mechanics of stock splits and what it means to you.

Of course, as a privately traded stock, retail investors won’t have a chance to participate in that split. Stock splits are not a new thing, and they’re certainly not new to Alphabet. The company has conducted multiple stock splits already, back in 2014 and more recently in 2019. For Alphabet, these splits present investors with more accessible GOOG and GOOGL stocks. If a company whose shares cost $1,000 apiece underwent a 2-for-1 stock split, the overall amount of shares would double while the price of each share would drop to $500. An investor who owns 100 shares in this fictional company would still have $100,000 worth of stock, but would own 200 shares instead.

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. Regarding this most recent stock split, though, one could point out that it may be more meaningful due to the greater number of shares being created in the transaction.

Retail investors can, of course, buy fractions of Alphabet shares on trading platforms. For all that current and potential growth, Alphabet stock is trading at a significant discount to its historical range. The stock is selling for just 20 times earnings, its cheapest valuation since 2012.

Rather, it’s the company’s history of robust performance and execution that makes Alphabet stock a compelling choice. 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.

Alphabet Announces 20-for-1 Stock Split. Here’s What You Should Know.

The company maintained this stock structure through its 2015 rebrand to Alphabet. Alphabet announced Tuesday that it plans to split its stock 20-for-1. The move will dramatically lower the price of each share, so as to make them more affordable and appealing for smaller investors. Common stock split ratios are 2-for-1 or 3-for-1, where a shareholder receives an additional one or two shares for every stock held. The unit price of the stock will fall by a division of two or three, accordingly, after the split takes place. 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.

When did Google stock split?

The timetable varies slightly from brokerage to brokerage and can take several days before the new shares make an appearance. For each share of Alphabet stock an investor owns — currently crypto futures for beginners 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.

This pushed the stock price to near $3,000 per share — but its about to get a whole lot cheaper. Unlike peers like Meta, GOOGL retains full control over much of its platforms, like search and YouTube. That valuation comparison is curious considering that AAPL is projected to grow at half the rate of GOOGL.

Alphabet (GOOGL) live share price

He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. On the other hand, GOOGL has historically been a poor allocator of shareholder earnings, as evidenced by the historically increasing cash hoard. This is in my opinion the only key metric worth focusing on right now (GOOGL is such a clear-cut story that focusing on quarter to quarter numbers is missing the bigger picture). Analysts said the move may also make it easier for the company to enter the Dow Jones Industrial Average.

Related Articles

Companies carry out stock splits with the intent of making their stock prices more attractive to retail investors. On 15 July 2022, Alphabet conducted a 20-for-1 stock split in the form of a one-time special stock dividend on each Class A, Class B and Class C share. Moreover, revenue crushed estimates, with Alphabet drawing in over $75 billion in 2021’s final quarter. The stellar numbers come as the company announces significant jumps in revenue across its advertising and cloud service arms. Of course, the meeting also came with the announcement that Alphabet would be undergoing a stock split.

This resulted in net income of $20.6 billion and earnings per share (EPS) of $30.69, which surged 38%. That’s impressive growth, particularly for a company with a market cap of $1.94 trillion. For example, a shareholder might own 10 shares worth $100 each in a company.

The U.S. govt just unlocked an $8 trillion market to move in a new direction. On an adjusted basis (my adjustment for unrealized gains), GOOGL earned $26.77 in EPS versus $19.24 in the prior quarter. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time. “Alphabet still has room for further YouTube monetization and monetization of Maps.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *