Without question, Google is one of the most massively recognizable brands in the tech sphere, where it gets considered one of the Big Five. That group of information technology companies also consists of Apple, Microsoft, Meta, and Amazon, whose products dramatically impact and control the digital landscape. Originally started as the search engine Backrub in 1995 by two students, Larry Page, and Sergey Brin, Google managed to beat out competitors like Bing and Yahoo and remain at the top of the foot chain, controlling almost 80% of the global market share concerning search engine use.
To say that Google is a tech and marketing powerhouse would be an understatement. In 2022, this company generated $224 billion from ads alone, with this money accounting for 80% of Google’s revenues. It added another $26 billion from its cloud services and $29 billion from what its other segments, Pixel phones, YouTube Premium, and Google Play. It has managed to create a sustainable business model that utilizes hidden revenue generation, making the brand a compelling value proposition for software publishers, content creators, and virtually any online business, helping them monetize their content and services, primarily through targeted ads. And Google’s industry-leading search algorithm continuously leads to the death or prosperity of businesses with each update.
In July 2022, Alphabet and Google underwent a much-publicized stock split that made buying a piece of this juggernaut super accessible for all. That represented the third corporate action of this type that Alphabet had conducted in its history, with the previous two occurring in 2014 and 2015. It gets detailed below, paired with an explanation of how newbie investors can now get their share of Google in their investment portfolios.
Understanding Google Stock Split
After the closing bell of July 15th, 2022, all Alphabet stock price got divided by twenty. So, anyone that owned 100 GOOGL shares at $2,000 per one got 2,000 shares, with a price point of $100 per share. So, the total value of their investment remained unchanged.
It is vital to note that for existing Alphabet stock owners. The split means very little. It is chiefly cosmetic. It will not have any ramifications on the company’s business or core guiding fundamental principles of management. Its driving factor is to make Alphabet stocks more accessible to the general public and increase Google’s liquidity. For inexperienced traders, when an entity’s stock gets traded at higher prices, that incurs less trading activity since fewer traders are willing to sell and buy stocks that cost a lot of money. Conversely, when the share price is lower, that produces a higher trading volume.
Advantages and Disadvantages of Investing in Google Stock Split
As mentioned, through its latest stock split, Alphabet is trying to widen its investment pool, making it one of the most-favored mega-cap tech stocks on Wall Street. As a whole, most industry experts view this corporate action as a positive development for investors. That is so because it makes the stock more liquid and accessible, leading to more selling and buying activity in the future, which is a beneficial long-term prospect. There is no right or wrong answer regarding if one should have bought shares in Google before or after this action, as that comes down to one’s goals and investment strategy.
Those in the market for long-haul growth should have probably invested before the split, as by doing so, they could have gotten more shares for their money and enjoyed more benefits from GOOGL’s success going forward. Yet, those who sought short-term gains likely invested after the split, buying shares at a lower price than they could off-load when they increase in value, turning a profit. When an investor has more shares, that allows them to trade with less risk, opening the door for more opportunities.
How to Invest in Google Stock Split
Investing in split stocks does not differ from buying regular ones, as they are the same thing. These shares only undergo an automatic split that lowers their share value and the equity they represent. It is best to use a market trading app with various stock market alerts that inform investors of dramatic price shifts so that traders are up to date on market happenings and announced sizeable moves. Some of these pieces of dedicated software also permit a user to buy shares directly.
Before anyone goes running to purchase some Google stocks, they should know that two kinds exist. The Alphabet ones come in two flavors. These are GOOG and GOOGL. The first is Class C stock that comes with no voting rights, while GOOGL is a Class A one that supplies shareholders the right to vote on developments within the company. As one would expect, the addition of voting rights signifies that GOOGL stocks can get traded at a bit of a premium over their Class C counterparts.
Anyone wanting to purchase either should open a brokerage account with a firm, hire a portfolio manager, or get an investment app. Then, they should decide on the size of their initial investment, meaning pick their budget, which shall define how many shares they will purchase. Reviewing quarterly and annual reports before buying stocks is mandatory to learn if the given moment is the right one to stick to and purchase. These are publicly available information filled through 10-Q and 10-K forms, meaning anyone can view them by searching the SEC database.
To place an order for some stocks, an investor must enter the company’s ticker, the number of shares he wants to purchase, or the dollar value he wants to invest in their app. Or make this demand from their broker. Google trades on the NASDAQ exchange. So, anyone can buy its shares Monday through Friday, between 9:30 AM and 4 PM.
What Is a Stock Split and How Does It Affect My Investment in Google?
As everyone knows, a publicly traded company has outstanding shares representing pieces of it. Its board of directors can choose to increase its number of shares by issuing more of them, and when they do that, they lower the value per share but maintain the value of the pool when it gets totaled.
For instance, in a 5:1 split, shareholders get four additional new shares. If the company had one million in circulation, it now has five million. That means that the price of the outstanding shares gets lowered proportionally while the market capitalization of the entity remains unchanged.
On the other hand, reverse stock splits are when a company reduces the number of outstanding shares, boosting the market price of these stocks. That usually happens when an entity is struggling and looking to survive.
In short, the 2022 Google stock split has little to no effect on existing investors, as it is nothing more than a tool to attack new ones.
How Do I Buy Google Stock Split Shares?
The best method to go about it is to pick brokerage accounts with no commission fees that let users buy fractional shares. At least, that is the most affordable option for newbies. The goal of the Google stock split is for more investors to buy entire shares. Yet, for some, that may still be too rich for their blood, and they only want to put in small amounts of cash in the company, not holding an entire share. Thankfully, that is possible at places like Betterment, Fidelity, Interactive Brokers, M1 Finance, Robinhood, Schwab, and Stockpile.
Another option is to invest in Google’s newly split stocks via mutual funds. These get managed by professionals, and index ones are funds that aim to replicate a specific part of a market, like an individual sector, and are the preferred choice for many who do not fancy holding individual stocks. Various such funds and ETFs (exchange-traded funds) have Google stocks in them. At the time of writing, the Vanguard Total Stock Market ETF (VTI, has approximately 157.20 million shares of Google.
Is Investing in the Google Stock Split a Good Idea for Beginners?
In short, yes. Google holds 85% of the mobile search market and 75% of the overall one. It is expanding in other sectors and has substantial capacities that allow it to become a threat in each.
As more people get online, the more search data Google collects, the more valuable the brand becomes. So, it is for sure a safe investment for everyone.
Tips for Investing in Google Stock Split
A stock split on its own should never be a driving force to buy a company’s stocks. Regarding Google’s split shares, potential investors looking to get some should monitor anti-trust lawsuits and regulatory challenges concerning acquisitions, as they generate negative headlines that can dramatically affect stock prices. Hence, following them can deliver insights into decent entry points.
Also, it is wise to look into when and how competitors like the ever-growing DuckDuckGo are doing, as they can also affect Google’s dominance. They are unlikely to threaten it but can minimize it.
Investors should never put their eggs in one basket and always look to diversify as a risk-mitigating strategy. On top of buying Google shares, they should also get others labeled as safe ones from experts.
Final Thought
For lower-end investors to whom Google shares were always out of reach. The 20:1 2022 split now makes owning a slice of the world’s premium search engine company a more attainable option. Anyone that can afford to grab a share should do so, as Google is a brand with substantial cash holdings and unparalleled industry power.