(By the way, if you’re wondering if Alphabet will split again so you can jump onto more palatable stock prices, think again. The odds are relatively low that Alphabet will split its shares in 2018, but it's still a possibility if the tech giant sees an opportunity to become part of the most closely followed market benchmark. At Google’s price of $906.66 on 8/21/17, that $1,000 investment in Google — assuming you got the IPO price — would be worth $21,333.18 in 2017. Google created an entirely new class of share and issuing them to shareholders as a stock dividend. By doing so, the founders were able to do a stock split and get Class C shares as a result, which they could then sell or otherwise dispose of if they so chose, and still be able to retain their majority voting control of the tech giant. However, with its far-reaching investments, from broadband cable to life sciences to driverless cars, Alphabet has its hands on everything in so many different sectors. The intent was to give the new nonvoting stock equal economic rights to the company, with the only distinction being the voting power of the new shares. Read, learn, and compare your options in 2020. The stock split came as Alphabet's share price pushed into the high triple digits. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. However, in an unusual move, Google shareholders challenged the split, arguing that its unique structure was against shareholders' best interest. GOOG's second split took place on April 27, 2015. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. For example, a 2002 share position pre-split, became a 2007.496491 share position following the split. It’s pricey. Many successful companies have done stock splits during their histories trading on a stock exchange, and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) has shared its bounty with shareholders by splitting its shares. This summer, Alphabet stock hit an all-time high and rose more than 30 percent over the past year. With those vast opportunities, as well as a leadership team that dreams absolutely gigantic dreams, Google is still one of the best stocks to own—if you can stomach the price. The perceived problem with Class C shares is that Google set them up to have no voting power. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Most notably, last year Facebook proposed a similar structure for its future stock split, and many companies have embraced multiple classes of shares that allow management to retain voting control while divesting the majority of the economic interest in their companies. This article was updated on Nov. 28, 2017, and originally published July 11, 2016. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Best Online Futures Brokers Trading Platform, How Good Grades Can Affect Your Car Insurance Rates, Best Cheap Vision Insurance Options for Seniors, Cheapest Full Coverage Motorcycle Insurance, Do Not Sell My Personal Data/Privacy Policy, A 2-for-1 split occurred to create a new class of, You can invest in GOOGL by using one of Benzinga’s top picks for. Apple (NASDAQ:AAPL) executed a 7-for-1 stock split in mid-2014, bringing its share price down to roughly the $100 mark and receiving an invitation to join the Dow the following year. At times, the disparity between Google Class A and Class C shares has been far wider. Benzinga breaks down how to sell stock, including factors to consider before you sell your shares. Subsequently, the prices of both share classes have roughly doubled in the span of less than four years. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Advertiser Disclosure: We provide you with up-to-date information on the best performing penny stocks. If you’re ready to begin investing, and want to purchase GOOGL stock, check out Benzinga’s top online brokerages. Will YouTube Become Your Favorite Place to Shop Online? Rather than simply doubling the number of shares outstanding, Google took the opportunity to create a brand-new class of shares, known as Class C shares. Cumulative Growth of a $10,000 Investment in Stock Advisor, Will Alphabet Do a Stock Split in 2018? Because they wield 10 votes each, the insider-owned Class B shares still have majority control over the company and will continue to do so as long as their owners maintain the discipline not to sell them off. Market data powered by FactSet and Web Financial Group. The fact is that even the voting rights Class A shares have are relatively meaningless. Below, we'll look at the case for an Alphabet stock split in 2018 as well as some of the factors that could go into such a decision. Based on the chart above as of November 2017, the Class A shares fetch between a 1% and 2% premium compared to the Class C shares, reflecting investor ambivalence to the idea that their voting rights have much value. Benzinga Money is a reader-supported publication. Google’s controversial stock split in 2014 (prior to Facebook’s IPO announcement) transpired because the company wanted to create a new class of non-voting shares. Google has realized a gain of 1,780%. These 3 Value Stocks Are Absurdly Cheap Right Now, MANA Stocks vs. FANG Stocks: 2 Years Later. Yet Alphabet does have one stock split in its 13-year history as a publicly traded stock, and investors who like to see such moves as a sign of a company's confidence in its future wonder whether the tech giant might do so a second time.
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