Alphabet Inc. is finally carving into its gargantuan stock price with a stock split, which leaves only one Big Tech company remaining with a huge per-share price despite an easy avenue to change it.
Alphabet’s path to a stock split is more difficult than it was for Apple Inc. AAPL,
Google’s previous split in 2014 was much different, as it was a vehicle to create a new class of stock that did not convey voting rights, an obvious ploy to maintain the control of co-founders Larry Page and Sergey Brin, who own class B supervoting shares. Class A shares trade under GOOGL,
If all that seems complex, it isn’t just you. And the complexity forced upon Google investors seemed to be a major hold-up for a long-needed stock split — Alphabet’s class A shares have surged approximately 336% since that split, which didn’t really do much to reduce the per-share price because that was not the aim.
The stock surged again in after-hours trading Tuesday, though that was more likely a result of a blowout holiday-quarter performance that surpassed Wall Street’s expectations. Shares gained more than 9% in after-hours trading, with each trading class topping $3,000 and putting a $2 trillion market capitalization within sights.
The stock split, if approved by Alphabet investors, would leave only Amazon.com Inc. AMZN,
With AWS chief Andy Jassy taking over the mothership last year, that looks unlikely. So what’s the holdup, Andy? After all, a split could lead you to blue-chip status on the Dow.
Either Google or Amazon, with a smaller per-share price, would seem to be obvious candidates for the Dow, which instead took Salesforce.com Inc. CRM,
Big Blue has represented tech in the Dow for decades, but Amazon and Google rule the tech roost right now, along with current Dow components Apple and Microsoft. With one reducing its per-share price and another overdue to do the same, it could be time for another shakeup.
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Therese Poletti writes the “Tech Tales” column for MarketWatch. Follow her on Twitter @tpoletti.