Google’s parent company Alphabet has confirmed plans for a rare 20-for-1 stock split, giving shareholders 19 more shares for each one they hold – but when does the split take place?
Here’s what you need to know about the tech giant’s announcement.
Stock split explained
Before we dive into Alphabet’s announcement, let’s explain the meaning behind a stock split.
A stock split or stock divide increases the number of shares in a company. If a stock splits 3-for-1, this means a stockholder has three more shares of a stock after the split takes place.
If there were 10 million shares of a stock and it splits 3-for-1, this means there are 30 million shares of that stock.
Alphabet move explained
Google’s parent company confirmed a rare 20-for-1 stock split on Tuesday (February 1st 2022) after it reported record fourth-quarter earnings.
Alphabet chief financial officer Ruth Porat explained more about the decision in a conference call:
“The reason for the split is it makes our shares more accessible. We thought it made sense to do [it].”
Following the announcement, Alphabet stock shares had soared more than 9% by late Tuesday. The company also reported revenue growth of $75.33 billion in the fourth quarter, up 32% year-on-year.
Alphabet has followed in the footsteps of tech giants Tesla and Apple – their shares surged following a similar stock split decision.
Date of stock split
The Wall Street Journal reports the split will happen on Friday, July 15th 2022. This means shareholders will receive an additional 19 shares for every share they own on that day.
After the split, Alphabet stock will begin trading again on Monday, July 18th. This is the second split Alphabet has announced since going public in 2004. The company announced a stock split in 2014 and its shares rose to $1,000 at the time.
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