Google announces a 20-for-1 stock split

Anyone with 138 dollars can become a Google shareholder. Alphabet, Google’s parent company, which recorded earning surprise in the fourth quarter of last year, has announced a 20-for-1 stock split.

According to Bloomberg and other media reports on Wednesday (local time), Alphabet will be splitting its stock 20 for 1 in July this year. As of July 1, a shareholder that owns one Alphabet stock will be given 19 additional stocks after the market closes on July 15. Accordingly, the price of an Alphabet stock, which currently stands at 2,753 dollars (approximately 3.328 million won) will be reduced to 138 dollars (around 167,000 won).

Alphabet was listed on NASDAQ in 2004 and its stock underwent 2 for 1 split in 2014, which marks the recent split the second of its kind. Although a stock split does not have a direct impact on corporate value, it is considered favorable in terms of providing more access to individual investors. More affordable prices mean more distribution of stocks, making it easier for mom-and-pop traders to buy shares. Stock prices of Alphabet rose 10% after the announcement.

Share value of large tech companies such as Google, Apple, and Facebook soared as online transactions increased due to COVID 19. The stock value of Alphabet has also risen by 40% over the past year. Alphabet CFO Ruth Porat explained that the split was made as it would make Google’s shares more accessible.


Seong-Mo Kim mo@donga.com