This year marks 20 years since Alphabet (GOOGL 0.30%, GOOG 0.33%) went public. Initially, the company faced regulatory challenges and had to lower its IPO price to a split-adjusted $2.13 per share.
Despite these setbacks, Alphabet grew into a major digital advertising powerhouse, using its profits to acquire many companies. An investor holding one pre-split share would have seen significant gains over the past 20 years.
Alphabet’s Share Growth
Investors who bought one share in 2004 now own 40 shares—20 with voting rights (GOOGL) and 20 without (GOOG). This is due to a 2-for-1 stock split in 2014 and a 20-for-1 split in 2022.
Today’s total return from that initial investment would be just under $6,700, including dividends starting in Q2 2024.
Lessons from Alphabet’s IPO
While Alphabet’s gains may not match Amazon’s, where a 1997 IPO share is now worth about $34,000, it’s important to note that Amazon’s market cap was only $450 million at its IPO, compared to Alphabet’s $27 billion.
This highlights that companies today often go public at larger sizes. However, the Alphabet example shows there’s still potential for significant returns. Lessons learned can lead to opportunities with future tech leaders.
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