This year, Alphabet (GOOGL 0.30% / GOOG 0.33%) celebrates 20 years since its IPO as Google, Inc. Initially priced lower due to regulatory pressures, it launched at a split-adjusted $2.13 per share.
Despite early obstacles, Alphabet grew into a major digital advertising company, using its profits to acquire other firms. Early investors saw significant returns, even from a single pre-split share.
Alphabet’s Share Growth
Investors who purchased one share in 2004 would now hold 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 subsequent 20-for-1 split in 2022, enhancing share value.
Today, this investment would be worth nearly $6,700, including future dividends starting in Q2 2024.
Takeaways from Alphabet’s IPO
While this return may be less than Amazon’s (where an IPO share from 1997 is now worth $34,000), it’s essential to note that Amazon started with a market cap of about $450 million, which grew exponentially to reach Alphabet’s IPO market cap of $27 billion.
This shows that companies today often go public when they are already large-cap, but Alphabet’s journey indicates that substantial gains are still possible from such market caps. Future tech leaders can also offer major returns.
