8/8/22, 10:42 PM What the Stock Split by Google’s Parent, Alphabet, Means - WSJ

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https://www.wsj.com/articles/google-parent-alphabet-stock-split-11643761853

MARKETSFINANCE

What the Stock Split by Google’s Parent,

Alphabet, Means
Alphabet announced plans for a 20-for-1 stock split as part of the technology
company’s quarterly earnings statement

By Michael Wursthorn Follow

Updated Feb. 2, 2022 10:01 am ET
Google parent Alphabet Inc GOOG 0.18% ▲ . said on Feb. 1 that it will enact a 20-for-1 stock
split, giving shareholders 19 more shares for every one they own.

Stock splits had fallen out of favor over the last two decades. But since the pandemic Apple
Inc., Tesla Inc. and now Alphabet have revived the practice in an effort to make their shares
more affordable for individual investors.

Alphabet announced the split with its latest quarterly earnings, which sent shares up 9% in
early trading Wednesday.

What does this mean for investors?

Alphabet shareholders as of July 1 will receive 19 additional shares on July 15 for every
share they hold. Trading will begin on a split-adjusted basis on July 18.

The split will cover all three classes of Alphabet stock. Were the split to happen as of
Tuesday’s close, Class A and Class C shares would trade at roughly $137 apiece, down from
about $2,750 as of Tuesday’s close. Class B shares aren’t publicly traded.
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8/8/22, 10:42 PM What the Stock Split by Google’s Parent, Alphabet, Means - WSJ

What does this mean for the company?

Alphabet’s shares rose 65% last year, a third straight double-digit annual gain.

On Feb. 1, Alphabet said it nearly doubled profit over 2021. But expectations that the
Federal Reserve will raise interest rates as soon as next month led to a January market
retreat that marked the worst month for stocks since the first month of the pandemic.
Alphabet has held up better than many, but shares are still down 5% following four rough
weeks of trading.

Does the split make Alphabet more valuable?

No. Splits don’t affect the value of an investor’s holdings. A lower per-share price is
matched by a higher number of shares.

What does this mean for the stock market?

Stock splits don’t tend to have a significant impact on share prices over time, and they
don’t tend to have much effect on the broader market either.

GOOG vs. GOOGL: What’s the Difference?

The split applies to all three classes of Alphabet stock. Class A common shares have been
available to investors since Alphabet went public in 2004. They currently trade under
ticker GOOGL.

The company’s Class B stock is held by company insiders and these shares aren’t publicly
traded. They hold 10 times the voting power of Class A shares.

Another class of nonvoting shares known as Class C trades under ticker GOOG. They
largely trade in line with the common shares—the spread between the two is currently less
than 25 cents—though at times the spread has widened to as much as $10 a share.

Has Alphabet split its stock before?

Alphabet last split its stock in 2014, giving investors one additional share for every one
they owned.

Write to Michael Wursthorn at michael.wursthorn@wsj.com

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