Google’s parent company Alphabet will execute a 20-for-1 stock split in mid-July, making each share less expensive. Not everyone has over a thousand dollars to spend on a single stock, so what Google is doing will make purchasing their stock much more accessible. On Tuesday, the price of the Class A stock was US$2,753 and the split would reduce it to about US$138 per share.
This news spiked Alphabet’s stock up nearly 11 per cent in premarket trading on Wednesday. In addition to attracting everyday investors, the transition may “set the stage for inclusion into the [Dow Jones Industrial Average],” When Apple completed a stock split in 2015 it was added to the Dow Jones.
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown said it shows “a mark of confidence… It shows management is very happy with where they are,” Being 2 years into the pandemic, it has boosted demand for digital advertising as people spend more time online. Alphabet generated 20.6 billion in profit last quarter, surpassing Wall Street expectations.
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