If You Had Invested Right After Google’s IPO

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If You Had Invested Right After Google’s IPO

Google Inc. has established itself as one of the world’s top technological corporations. Google class A and C shares have a total market valuation of $440.47 billion as of July 27, 2015. By market capitalization, Google is the world’s second biggest firm, after only Apple Inc. Google’s market value is more than ten times that of some of its rivals, like Yahoo Incorporated, which has a market capitalisation of $35.16 billion. Google’s market capitalization is also 1.67 times that of social media behemoth Facebook Incorporated (FB), which is valued at $264.45 billion.

You might have purchased 12 shares for $1,020 if you had bought at the initial public offering (IPO) price of $85. You would have 12 Google Incorporated class C shares (GOOG) and 12 Google Incorporated class A shares (GOOG) after the stock split (GOOGL).

If You Invested in Google After Its IPO

On April 29, 2004, Google, the world’s most popular Internet search engine, filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC). Google made $961.90 million in sales in 2003, prior to its IPO. In its IPO, the business hoped to raise $2.7 billion.

Google went public on August 19, 2004. The business went public at an IPO price of $85, sold 22.5 million shares, and raised more than $1.9 billion. Google shares climbed 18.05% to $100.34 at the closing on the IPO day. If you could have purchased Google shares at $85, you would have gotten 12 shares, or $1,020 divided by $85, before the corporation split its stock.

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2014 Stock Split

You would have been allowed to participate in the stock split if you had held 12 shares of Google Incorporated prior to the record and ex-stock dividend dates. The corporation issued a 100% equity spinoff, which is equivalent to a two-for-one stock split.

Google announced the creation of a new class of non-voting capital stock, or class C equity. Google paid out shares of its class C stock as a dividend to investors on March 27, 2014, with a dividend record date of March 27, 2014 and a dividend payment date of April 2, 2014. The ex-dividend date for the new class C shares was April 3, 2014.

Following the stock split, you would have received one Google Incorporated class C share for every Google Incorporated class A share you held. You would have possessed a total of 12 shares of each stock. You would have had 12 voting rights after the stock split, since each class A share of Google gets one vote.

Present-Day Value From a Google IPO Investment

Google Incorporated’s class A stock finished at $658.27 per share on July 27, 2015, while its class C shares ended at $627.26 per share. At the moment, a $1,020 investment would be worth $15,426.36, which is 12 shares multiplied by $658.27 per share + 12 shares multiplied by $627.26. The return on investment (ROI) from these Google IPO shares would be 1,415.39%.

Comparing the ROI from Facebook

The ROI achieved by investing at the time of Google’s IPO is over ten times that of Facebook if you invested $988 immediately after Facebook’s IPO. If you were able to acquire Facebook shares at the IPO price of $38, you would have 26 shares. Facebook ended at $94.17 a share on July 27, 2015, making your investment worth $2,448.42. Your return on investment would have been 147.82%.

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