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

This is because on the split record date, stakeholders were issued 20 new GOOGL shares for each one they already owned. So, if a shareholder had 10 GOOGL shares before the stock split, they had 200 shares after. In sharing this anecdote, I wish to convey the hidden opportunities that Google can capture beyond its core products of Search, Gmail, and YouTube.

A reverse stock split is a method used by public companies to immediately boost their share price. However, there are issues with reverse splits that investors need to be mindful of. This article will delve into the mechanisms and issues surrounding a reverse stock split. If you are considering Google as a potential investment, this might be a good time to buy it on a correction as the share price becomes affordable.

1. When a company’s shares are trading at a high price, there is often less trading activity because fewer investors are willing to buy or sell the shares.
2. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
3. We have held GOOGL as a core portfolio stock for many years and took the opportunity to add more shares as the company grew its business.
4. Since class C shares hold no voting power, they haven’t been included.

This stunning revelation is bringing a fresh wave on interest to the tech giant and its stock. It also raises a number of questions of interest for investors involving just how a stock split works and what it means for investors. Companies carry out stock splits with the intent of making their stock prices more attractive to retail investors. However, one unique advantage with a reverse stock split is that a company with genuinely positive developments can now highlight its progress to the market.

Consequently, GOOG stock now has the lowest price target upside (31.2%) as compared to AAPL, MSFT, NFLX, and META. On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Is a reverse split good for a stock?

I pulled the following comparison chart which showed the rating on GOOG stock surpassing MSFT’s sometime in late March to lead the MAFANG/MAMANA. The consensus rating among Seeking Alpha authors is a “Buy” with a score of 4.27. Wall Street analysts are more bullish on Google stock, with a consensus rating of “Strong Buy” and a score of 4.7. All Wall Street calls are either “Buy” or “Strong Buy”, not a single “Hold”, “Sell”, or “Strong Sell”, seemingly a demonstration of their confidence in the advertising giant. GOOG’s growth factor grade of B- is respectable and is an improvement over the C+ three months ago. Momentum has deteriorated to B+ but as mentioned earlier, to the credit of GOOG stock, it has lower volatility than most other tech mega caps.

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While the FAANG stocks have certainly fit the bill for the past decade, it’s companies enacting stock splits that have been investors’ preference over the past couple of years. Google is obviously not struggling as a company like GE, but J&J’s split does present a solid claim for Google to split once again. The prices of GOOG and GOOGL continue to rocket far beyond an average investor’s budget. At the same time, different Alphabet companies distance themselves from the pack and require increased resources and attention.

Google Stock Split: Why Is It Splitting And What It Means For Investors

Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. 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. 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.

There’s no denying the continuing trend toward digital advertising and the one-two punch of Alphabet’s industry-leading position and its billions of users worldwide. Rather, it’s the company’s history of robust performance and execution that makes Alphabet stock a compelling choice. For example, a shareholder might own 10 shares worth $100 each in a company. If the stock split 2-for-1, afterwards they would own 20 shares worth $50 each.

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Alphabet’s wide Economic Moat Rating, which means the company has a competitive advantage, will be unaffected by the split. In January 2023, Alphabet announced plans to cut approximately 12,000 roles from its https://broker-review.org/ workforce, with expected severance and related charges ranging from $1.9bn to $2.3bn. The company also anticipates incurring exit costs of approximately $0.5bn in Q due to global office space optimization.

In contrast, Meta Platforms (FB) dropped its investors a bombshell as they parsed its adjustments to Apple’s privacy changes. Many argue that investing in Alphabet, just like with many Silicon Valley companies, is an investment in the leadership and the founders more than anything. As a result, by maintaining majority voting control of their company, Page and Brin ensure that investor confidence in their company remains high, so long as they both remain at the helm.

Google class A stock (GOOGL) splits

For one, the current share price makes the stocks inaccessible to certain investors, particularly those who trade part-time or do not have a lot of capital. Google class C (GOOGL) were created following the first stock split in April 2014, and ownership of these shares grant no voting privileges at shareholder meetings. Google stock class C trades at a slight discount to its class A counterpart, but the two prices often move in correlation.

It looks like this company has finally matured from a cash-hoarding arrogant tech firm to a shareholder-focused mature company. 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 fxtm review to accommodate for the 20-fold increase in the company’s outstanding share count. We don’t think that Alphabet’s long-term thesis as an anchor growth stock has changed due to its proposed stock split. We have held GOOGL as a core portfolio stock for many years and took the opportunity to add more shares as the company grew its business.

Nevertheless, as discussed above, Alphabet Inc is a steady and quiet performer. While it has middling performance, its stock is less volatile and offers decent appreciation over the long term. Hence, I am rating GOOG/GOOGL as a Buy, but I suggest interested investors to size their entries appropriately over the following months given that it will be easier to do so after the stock split.

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. If not, you might be reading this on an Android phone, or perhaps you are a user of Google Maps, Gmail, Chrome, or any of the company’s other products. A Google share was worth around $2000 before the split announcement. This means that even small investors can now afford to buy shares of GOOGL. He finds undervalued companies with secular growth that appreciate over time.