Alphabet Share Split PDF

# Alphabet Share Split May Trigger Retail Buying, Analysts Say **Lewis Krauskopf and John McCrank** New York - Alphabet Inc's 20-for-1 stock split puts it on course to follow other major companies that have executed similar moves in recent years. The Google parent's share price soared more than 8...

# Alphabet Share Split May Trigger Retail Buying, Analysts Say **Lewis Krauskopf and John McCrank** New York - Alphabet Inc's 20-for-1 stock split puts it on course to follow other major companies that have executed similar moves in recent years. The Google parent's share price soared more than 8% on Wednesday after it reported record quarterly sales along with the share split. Other megacap peers that have undertaken stock splits since 2020 include Apple, Tesla and Nvidia. Between 2017 and 2021, 26 S&P 500 companies executed stock splits, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices Peng Cheng, head of machine learning strategies at JP Morgan said stock splits in general have a "psychological effect". "One would much rather spend US$100 and own 100 shares, than to own 0.1 share," Cheng said. "We observe lower retail participation in high-priced stocks than low-priced stocks." Retail buying surged in the wake of both the Apple and Tesla stock split announcements, analysts at Vanda Research said. When Apple announced its 4-for-1 split in July 2020, retail investors went from purchasing less than US$150 million in Apple stock each week to nearly US$1 billion, according to Vanda. After Tesla's 5-for-1 split announcement in August 2020, retail buying jumped from US$30 million-US$40 million per week pre-announcement to over US$700 million a few weeks later. "Alphabet's announcement will almost certainly end up increasing retail investors' activity in the stock," Vanda analysts said in emailed comments to Reuters. For Alphabet, analysts said the stock split could pave the way for its addition to the Dow Jones Industrial Average. By reducing its stock price from roughly US$3,000 now to US$150 a share, Alphabet would make its stock more palatable for the 30-member Dow, which is a price-weighted index, meaning that high-priced stocks have an outsized influence. "A 20:1 stock split may bring more retail investors into the stock and could help set the stage for inclusion into the DJIA," UBS analysts said in a research note. Alphabet shares were up 8% on Wednesday.