Alphabet's Stock Split Has Taken Effect. Now What?
Earlier this year, Google parent company Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) announced plans to conduct a 20-for-1 stock split. It officially took effect at the market close on Friday, and today is the first day of trading with its new, shrunken share price.
When a company creates a lot of value over the long term, its share price typically generates high returns. In Alphabet's case, its stock had risen to $2,235.55, which made it a little expensive for investors who were only investing small amounts of money.
When a stock split occurs, the number of shares in circulation for a given company gets adjusted, which in turn changes its stock price. In Alphabet's case, its 20-for-1 split means each existing investor will now have 20 shares for each one they previously owned, which has shrunk the price of each share down from $2,235.55 to $111.77. The dollar value of their position stays exactly the same.
Source Fool.com
