How Many Times Has Google Stock Split?
Google, a subsidiary of parent company Alphabet, Inc., is a consistently high-performing tech stock. As with many tech stocks, it has sometimes split its shares to keep the price affordable for the average investor. But how many times has Google stock split? Keep reading to learn more.
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How Many Times Has Google Stock Split?
Alphabet (GOOGL) shares have split just twice. On April 3, 2014, shareholders of GOOGL received 1998 shares in exchange for every 1000 shares they owned, so a split of just under 2:1. On July 18, 2022, GOOGL split 20:1, so for every share held, the shareholder received 20 shares.
The 2014 split was interesting because it was different from a traditional stock split. Instead of issuing new shares of the same security, Google’s board decided to issue one share of a new class of stock for each existing share.
The company created a new class of stock under the ticker symbol GOOG and issued approximately one share of GOOG for each share of GOOGL held. To be more precise, shareholders received 1 share of GOOG for every 0.998 shares of GOOGL they owned.
GOOG shares are Class C securities, which means they don’t have voting rights. GOOGL shares are Class A, which have voting rights. So, holders of GOOGL shares can vote at shareholder meetings, while holders of GOOG cannot.
While shares of GOOG and GOOGL represent equal parts of the total company, GOOGL shares typically trade at a slightly higher price, reflecting the value of the voting rights.
The reason Google did this was so they would not dilute the power of the founders, who own large amounts of Class B shares, which are not available to the general public.
What Was Google’s Stock Price Before the Splits?
In 2014, Google’s stock was trading at $1,135.10 just before the split. After the split, the stock traded at $567.55.
In July 2022, before the 20:1 split, GOOGL was trading at $2,255.34 at the market close on July 15. When trading opened on July 18 after the split, the stock price was $112.64. But each investor had twenty times the number of shares they had owned previously.
What Is a Stock Split?
A stock split is when a company issues additional shares of stock to existing shareholders in an attempt to modify the share price of the stock. Issuing the shares increases the total number of shares without changing the market capitalization of the company, therefore it reduces the share price of the stock.
Here’s an example — XYZ Corp. stock is trading at $1,000 per share. There are 100,000 shares outstanding, so the company’s market capitalization is $100,000,000. Market capitalization is the number of shares times the price per share or the “value” of the company.
The board of directors of XYZ Corp. feels that this share price is too high and is making the stock feel prohibitively expensive to the average investor. So they decide to split the stock 5:1.
To do this, the company issues each existing investor five shares of stock for each one they currently own. If you owned 10 shares of XYZ Corp. prior to the split, you would own 50 shares after the split.
The stock price is, of course, set by the market — what people are willing to buy and sell the stock for — but nothing has changed with respect to the company’s fundamentals. So, the market will adjust the trading price to account for the additional shares, and shares will trade at about $200 per share — perhaps a little more or less, depending on how the market feels about the split.
Notice that, in the example above, your holding in XYZ Corp. is the same before and after the split. Before the split, you owned 10 shares valued at $1,000 per share, or a $10,000 position. After the split, you own 50 shares valued at $200 per share, also a $10,000 position.
What Is a Reverse Stock Split?
It also works the other way around, in a transaction known as a reverse stock split. If a stock’s price falls too low, the company can effect a reverse stock split to bring it back to a higher trading price.
For example, if ABC Company shares are selling at $5 per share and the company thinks that’s too low, they can do a reverse 1:2 stock split, reducing the number of shares by half. If you owned 100 shares of ABC prior to the split, you would own 50 afterward.
As with a stock split, the market capitalization hasn’t changed, so the shares would each be worth twice as much as before the reverse split, or $10 per share. Your pre-split position was $500 — 100 shares at $5 per share, and your post-split position is also $500 — 50 shares at $10 per share.
What Other Companies Have Split Their Stock?
Stock splits, while not common, are certainly not rare, especially for technology stocks which can see big price increases that can put them out of reach for many investors.
Besides Google stock, here’s a look at other companies that have split their stock:
Apple has split five times.
Amazon had a 20:1 split in June 2022, its fourth split in all.
Netflix has split twice.
Tesla has split twice, most recently at 3:1 in August 2022.
Final Take
Investors typically believe that a stock split is a good thing, and they may demonstrate this by providing a boost to the share price right after a split. The boost may be permanent or temporary, depending on the overall outlook for the company. So a stock split — or a reverse split — is often neither good nor bad, but simply a way to adjust the share price to make it more palatable to investors.
FAQ
Here are the answers to some of the most frequently asked questions regarding stock splits.
When was the last stock split for Google?
The last stock split for Alphabet (GOOGL) was on July 18, 2022. It was a 20:1 split, so for every share held, the shareholder received 20 shares.
How many times has Netflix stock split?
Netflix stock has split twice, in 2004 and 2015.
Information is accurate as of Aug. 22, 2023.
This article originally appeared on GOBankingRates.com: How Many Times Has Google Stock Split?
