Google Stock Gets Cheaper With 20:1 Stock Split

One share of Google's parent company Alphabet is suddenly a lot more affordable for Main Street investors — following a massive stock split that took effect Monday (early Tuesday, July 19, 2022, in Manila), Paul R. LaMonica reported for CNN Business.

Photo Insert: The stock split doesn't impact Alphabet's market capitalization.

Alphabet split its two classes of shares by a 20-to-1 margin, a move that slashed the price of one share from just over $2,200 on Friday to around $110 on Monday. The stock split doesn't impact Alphabet's market capitalization.

The corporation is still worth about $1.5 trillion, making it one of the most valuable firms on the planet. But the separation has two possible benefits. First, it may make Alphabet shares more tempting for average investors.

Second, it enhances the likelihood that Alphabet could ultimately be admitted to the famed Dow Jones Industrial Average.

That's because the Dow, which covers only 30 stocks, is weighted by price — in contrast to the S&P 500 and many other indexes that measure by market value. So if the Dow were to include a stock with an extremely high price, that would dramatically skew the index's daily performance.

Insurer UnitedHealth (UNH), which trades at more than $525 a share, currently has the biggest weighting in the Dow, making up about 11 percent of the average.

Meanwhile, Apple is the 13th biggest Dow component, despite the fact that it has a market value of $2.4 trillion, roughly five times that of UnitedHealth. Apple was added to the Dow in 2015, but only after a stock split in 2014 decreased its share price.

The list of Dow components is the topic of some controversy. Even while Dow contains Apple, Microsoft and commercial software titans Salesforce and IBM, some critics argue the century-old market barometer still needs a further overhaul for the 21st century.

That might mean adding Alphabet as well as Amazon, another market juggernaut that recently split its stock 20 to 1.

Amazon (AMZN) now trades at approximately $115 a share, down from pre-split levels above $2,000. But the corporation is still valued roughly at $1.2 trillion, about double the combined market valuations of retail titans Walmart and Home Depot, all of which are in the Dow.

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