Google parent company Alphabet (GOOGL) has announced a 20-for-1 stock split as part of the technology company’s quarterly earnings results.
The stock split by Alphabet comes a year and a half after Apple (AAPL) split its stock, issuing three shares for each share that people owned.
Alphabet said it will split its Class A, Class B and Class C shares of the stock, according to the earnings statement. Each shareholder at the close of business on July 1 will receive, on July 15, 19 additional shares for each share of the same class of stock they already own.
In 2012, Google added a third class of shares, Class C, with no voting rights. The company already had Class A shares, which carry one vote per share, and Class B shares, which are held closely by company founders and early investors and carry 10 votes each.
Google founders Larry Page and Sergey Brin control 83% of the company’s Class B shares, which do not trade on the open market.
Shares of Alphabet stock have become more expensive lately, at over $2,750 each at the time of market close yesterday (February 1), having doubled in price since May 2020.
A lower share price after the split would mean that more investors might be able to afford buying entire, rather than fractional, shares of the company.
Were the split to happen as of yesterday’s market close, the cost of each share would go from $2,752.88 to $137.64, and each existing shareholder would get 19 additional shares for every one they own.
There is speculation that Alphabet’s 20-for-1 stock split could pave the way for the company to be added to the Dow Jones Industrial Average, possibly replacing other technology companies such as IBM (IBM).
For the fourth quarter of 2021, Alphabet reported better-than-expected earnings and revenue. The company reported quarterly revenue growth of 32%, proving that it was able to withstand pressures from the pandemic and inflation.
Earnings per share (EPS) came in at $30.69 U.S. versus $27.34 U.S. that had been expected by Wall Street. Alphabet said its YouTube advertising revenue amounted to $8.63 billion U.S. versus $8.87 billion U.S. expected, while its Google Cloud revenue totaled $5.54 billion U.S. versus $5.47 billion U.S. that was anticipated.
Alphabet stock rose more than 10% in after hours trading following news of the quarterly results and stock split.
