Google's decision not to split its stock is curious, to say the least, especially when some Wall Street analysts are setting target projections of $600. Regardless of whether the company's decision proves right, it will be interesting to see if its strategy becomes the new standard in what some have speculated will be a new wave of Internet IPOs and stock run-ups.
Back in the day--as in, pre-2000 meltdown--the first thing every hot company would consider doing was a stock split, which is basically a psychological tactic to make an investment seem more affordable. It makes sense: to a small-time investor, it generally feels better to have 100 shares at $10 each, for example, as opposed to 50 at $20 each, even though the total value is exactly the same.
So will Google's bucking of this trend signal a new financial practice for the next generation of Internet stocks? Perhaps, but it also could be that the company simply wants to maximize the media attention it draws daily as its stock continues its upward trajectory. Either way, as an analyst points outs in this News.com story, it's worth noting that the no-split decision appears to run counter to "Google's premise is to help the common man."
"I'm thinking a split is in order at some point in time to make the stock more commercial, although if institutionals are backing it at this price then why would they split?"
--Explosive Value Oriented Stocks
"$32,586,660.29...the amount of money the market has valued each individual employee at Google, obtained by dividing Google's market capitalization by the number of employees. 105...the number of years as good as 2005 that Google would have to have to buy all their own stock."
"I held off buying google because I thought it would be a flop. Today, at this time, Google is $458.40. aaaaahhhhhhhh. This would have been a year plus income on this one stock.:("