About Alphabet’s 20-for-1 Stock Split

Alphabet shareholders voted to approve a 20-for-1 stock split on June 1, 2022, at the company’s annual meeting. This is the Google-parent company’s first stock split since April 2014.

At the current share price of ~$2,400, the new share price following the split will be approximately $120 per share.

Stock splits issue additional shares to shareholders. With more shares issued, the price per share will reflect a lower amount. Importantly, while stock splits reduce the price per share, they do not intrinsically impact the stock’s value.

What does this mean for Alphabet shareholders?

If you own 1 share of Alphabet stock, following the 20-to-1 stock split you gain an additional 19 shares at a new share price that is lower than the previous price per share. As an investor, following the split you’d own 20 total shares versus 1, with the total value of your shares remaining unchanged.

For example: Say you own 1 share of Company X at a current price per share of $1,000. Following a 20-to-1 stock split, you would own 20 shares of Company X at a price per share of $50. The total value reflects the same amount you started with, but you now own more total shares.

If you own a fraction of a share, the same math applies. For example, if you own 0.5 of one share of stock in this example ($500 worth), following a 20-for-1 split, you’d own 10 total shares with the same total value of $500.

The split will impact Alphabet shareholders of record as of July 1, 2022.

Please note that you may notice temporary inconsistencies in your portfolio charts after the split is completed after market close on July 15.

Please note that the 5-day view of your Alphabet investment within your Portfolio will not be available from July 18 through July 22.

Why do companies split their stock?

Stock splits are designed to make the cost per share for investors more accessible by increasing the number of shares and lowering the price per share. Stock splits had a greater impact on retail investor affordability prior to the advent of fractional shares because they made the price per one share of stock for expensive stocks more accessible for the average investor.

You can learn more about stock splits here.

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