Google's Alphabet will offer a 20-for-1 stock split, beating Tesla and Apple
Alongside announcing its revenues for the last quarter and financial year, Google's parent company Alphabet also announced that its board had decided to split its stock 20-for-1, CNBC reported. The stock split will effectively lower the price of each Alphabet stock, making it more affordable to investors, a company spokesperson said.
Stock splits are not new in the tech industry and not even rare events. In the past few years, names such as Tesla, Apple, and Nvidia have announced stock splits but nothing has matched what Alphabet plans to offer. According to Quartz's report, both Apple and Nvidia had announced a four-to-one split, which means that each shareholder of the company's shares received three more shares, without affecting their holding value. Tesla on the other hand had announced a five to one split, so its shareholders got one extra share in comparison to those received by Apple after the split.
A split is usually done when the stock price of a company rises tremendously. The split essentially reduces the value of each share but since the additional stock is issued to the owner does not dilute their holding. In Alphabet's case, the value of each stock is expected to reduce from the $2,750 that it is currently at to about $137, CNBC reported.
Tech companies like Tesla and Google's parent Alphabet have seen their stock soar during the pandemic years. Google also posted revenue of $200 billion in a single year for the first time in its history, The Verge reported. Although the company does not provide exact numbers for its various services, the sale of Pixel phones, smart home products, and Android operating system, brought in over eight billion in the last quarter alone.
Its advertising business continued to deliver strongly bringing in over $60 billion in the last quarter, unaffected by Apple's App Tracking Transparency policies, just the way YouTube brought in eight billion dollars in the last quarter of the year. Its Cloud service had an operating loss of 890 million but its autonomous driving division, Waymo, and life science company Verily, brought in $180 million in profits, The Verge reported.
The split needs shareholder approval and will be put into effect later in July this year if approved.