This year marks the 20th anniversary of Alphabet (GOOGL 0.40%) (GOOG 0.45%)‘s IPO. Initially, the company faced regulatory challenges and had to reduce its IPO price to a split-adjusted $2.13 per share.
Despite these hurdles, Alphabet grew into a major player in digital advertising, allowing for acquisitions of many other companies. As a result, even one share before the stock split would have significantly increased in value over the past 20 years.
Share Growth of Alphabet
If you bought one share in 2004, you’d now have 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, increasing share count significantly.
Today, this investment would be worth nearly $6,700, including dividends that started in Q2 2024.
Key Lessons from Alphabet’s IPO
While $6,700 might seem modest compared to Amazon‘s IPO gains (about $34,000 per share since 1997), it’s important to note that Amazon began with a much lower market cap of $450 million, making it easier for that value to grow rapidly.
This highlights a crucial lesson: companies often go public after considerable growth. However, Alphabet’s journey shows potential for significant gains even at higher market caps, opening doors for future investments in tech leaders.
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