Alphabet, a parent of Google, has launched a 20-to-1 split

Alphabet announced a split of 20 shares against one on Tuesday, leading to a 7 percent rise in stock prices in after-market trading, as recent financial results also exceeded expectations.

The split – just the second in 18 years since Google went public, after a one-on-one split in 2014 – brought the Internet company’s market value back to $ 2 trillion, despite the wider slump in technology stocks.

Alphabet ended the year with a 32 percent jump in revenue to $ 75.3 billion, slower than 41 percent in the previous three months, but still about $ 3 billion more than most analysts had expected. Earnings per share also successfully exceeded forecasts, rising 38% to $ 30.60 from expectations of $ 27.32.

Even after splitting 20 for one, trading on Wall Street late Tuesday suggested that Alphabet shares would still be worth more than $ 137 a share. Investors have responded enthusiastically to the division of shares by other major technology companies, although a simple division of shares does not matter for their intrinsic value. The split between Apple and Tesla in 2020 sparked big rallies.

The 36% jump in demand and other advertising revenue supported Alphabet’s dominance in the last quarter of last year, raising revenue from this major part of Google’s business to $ 43.3 billion. In contrast, YouTube advertising revenue rose 25 percent to $ 8.6 billion, while the Google Cloud division grew 45 percent to $ 5.5 billion.

Alphabet said the division of shares is subject to a vote to increase the authorized number of shares at its next annual meeting and will take place after the work is completed on July 15.

Source link