This year marks 20 years since Alphabet (GOOGL -0.14%, GOOG -0.10%) went public as Google, Inc. Despite regulatory challenges, the company’s IPO price was lowered to a split-adjusted $2.13 per share. Over time, Alphabet became a leader in digital advertising, using its profits to acquire other companies. An investor holding one share before the split has seen significant gains over 20 years.
Growth of Alphabet Shares
If you bought one share in 2004, you’d now have 40 shares: 20 voting (GOOGL) and 20 non-voting (GOOG). This is due to a 2-for-1 stock split in 2014 and a 20-for-1 split in 2022. Today, this investment would be worth nearly $6,700, including dividends starting in Q2 2024.
Lessons from Alphabet’s IPO
While Alphabet’s returns may seem lower than Amazon’s (where one share is worth about $34,000 since its 1997 IPO), it’s crucial to note that Amazon’s market cap was only $450 million when it went public, having grown significantly before meeting Alphabet’s $27 billion cap.
This suggests that companies today often IPO at a larger scale, but Alphabet’s story illustrates that substantial gains can still be made in the tech sector. The right approach may lead to significant returns with future tech leaders.
