Google’s parent company Alphabet announced on the 1st (local time) that it would split its stocks at face value by 20 to 1.
According to CNBC, Alphabet announced in Google’s quarterly earnings announcement that it would approve a plan to split stocks 20 to 1. Alphabet shares rose 8% in overtime trading after the announcement.
The move came a year and a half after the most recent split of Apple shares.
According to the revenue report, the alphabet divides A shares, B shares, and Class shares. Shareholders’ approval is required as it can affect other shareholders. Upon approval, 19 additional shares will be received per share of the same stock held as of July 1.
Google added C shares (GOOG) without voting rights in 2012, following A shares that exercise one voting right per share and B shares that have 10 voting rights. In 2015, the company changed its name to Alphabet and switched to a holding company, maintaining this stock structure.
In a letter, Google founders Larry Page and Sergey Brin described the movement at the time in 2012 as an “effective stock split,” and said that many shareholders had demanded it. Google split its shares 2-1 in 2014 before the alphabet transition.
Page and Brin own 12% of C shares and 83% of B shares that are not traded in the open market.
Alphabet shares have doubled since May 2020. As of this day, it exceeds $2,750 each week based on the market closing.
Meanwhile, Alphabet announced quarterly earnings that exceeded market forecasts.
Sales jumped 32% year-on-year to 75.33 billion dollars in the fourth quarter of last year. The forecast was $72.17 billion. Net profit was also 30.69 per share, exceeding the estimate of 27.34.
YouTube advertising revenue was $8.63 billion, less than the forecast of $8.87 billion, but the cloud exceeded the estimated $5.54 billion.
