Yesterday, Google made the stock split that they announced almost two years ago official. Traders who owned shares of the class-A stock were given new class-C shares, or non-voting shares, of the company. Even though this was technically a non-traditional stock split because a new type of share was created, it did give equal number of shares and cut the value of the shares in half. For example, if you owned 100 shares of Google before the split, you will now own 100 shares of Google’s class-A stock ($GOOGL) and 100 shares of Google’s class-C stock ($GOOG), which are now trading at roughly half the price of Google’s stock before the split.
One confusing aspect to keep track of is that before the split Google’s shares were traded under the ticker GOOG, which is now the ticker for the non-voting, or class-C, shares, while the voting, or class-A, shares received the new ticker GOOGL.
While there are plenty of reports out there that allude to the fact that the founders of Google are purposefully trying to dilute the public voting base of the company so that they will ultimately control the business decisions, this stock split might open up an interesting opportunity for the average investor.
Shares of Google before the split were trading at over $1,130, which is awfully pricey for most investors. However, after the split each different share type of Google was appropriately around $560, now even falling today to around $540 per share. These cut prices are much more manageable for investors who may have been weary of spending a large portion of their portfolio only for a handful of shares.
Certainly there is no way to tell if the company will continue to see massive profits like it has, but this does open up the opportunity for more investors to cash-in on that potential.