(Bloomberg) – Alphabet Inc. announced a 20-to-1 share split in the form of a one-time special share dividend, with the aim of attracting a wider audience to its shares.
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“The reason for the split is that it makes our shares more accessible,” Ruth Porat, Alphabet’s chief financial officer, said in a conference call with TV anchors. “We thought it made sense to do so.”
The new class of retail investors often emphasize affordability and brand recognition when deciding which stocks to buy. Alphabet has been disadvantaged as its shares are expensive and use the name of a holding company rather than the globally recognized brand, Google.
The stock split could lead to Alphabet’s listing on the Dow Jones Industrial Average, one of the most commonly listed indices, having 30 blue-chip companies. It could also help the company on its way to crossing a market value of $ 2 trillion. A previous share split occurred in 2014 after the company’s shares peaked at $ 1,000.
Porat said the split, announced on Tuesday, will come at the end of the company on July 15.
Alphabet shares extended the rise to 7% at. 16:24 New York time, after the share split was announced.
For more on Alphabet’s fourth quarter earnings, click here for our TOPLive blog.
(Removes erroneous reference to share value from fourth paragraph)
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