Understanding the Google Stock Splits

Google, a subsidiary of Alphabet Inc., has undergone two significant Google stock splits to date. The first split occurred on April 3, 2014, where shareholders received 1998 shares in exchange for every 1000 shares they owned, marking a split of just under 2:1. The second split took place on July 18, 2022, with a 20:1 ratio, meaning for every share held, the shareholder received 20 shares. This split was unique in that it involved issuing one share of a new class of stock for each existing share, creating a new class of stock under the ticker symbol GOOG for those holding GOOGL shares.

The Reason Behind the Splits

The primary motivation behind Google’s stock splits was to make the company’s shares more accessible to the average investor without diluting the voting power of the founders. By issuing shares of a new class (GOOG) without voting rights, Google aimed to maintain the voting power of its founders, who hold large amounts of Class B shares, which are not available to the public. This approach allowed Google to keep the value of its shares at a higher price for GOOGL holders, who have voting rights, while providing more shares for investors at a more affordable price .

The Impact of the Stock Splits on Google’s Stock Price

The Effect on Investor Accessibility

The Google stock splits have had a significant impact on making Google’s shares more accessible to a broader range of investors. Before the 2014 split, Google’s stock was trading at $1,135.10. After the split, the stock traded at $567.55, and following the 2022 split, the stock price opened at $112.64 on July 18, 2022. This reduction in price per share made Google’s shares more affordable for many investors, potentially attracting a wider pool of investors to the company.

The Future of Google’s Stock Splits

The most recent stock split, a 20:1 ratio on July 18, 2022, is set to significantly increase the number of shares available to investors. This move not only makes Google’s shares more accessible but also reinforces the company’s commitment to its shareholders, including those with GOOGL shares who have voting rights. The future of Google’s stock splits remains a topic of interest among investors, as the company continues to explore ways to maintain shareholder value while keeping the company’s shares affordable.

Conclusion

Google’s stock splits, particularly the 20:1 split in 2022, have been a strategic move to make the company’s shares more accessible to a wider range of investors. This approach has allowed Google to maintain its competitive edge in the market while ensuring that its shareholders, including those with voting rights, continue to have a significant stake in the company’s future. As Google continues to explore ways to grow and innovate, the impact of its stock splits will remain a crucial factor for investors and the company itself.