Google Stock Split Aimed to Make its Shares Affordable to Mass

Alphabet Inc. is brining big stock splits back to the market with the rationale that prospective buyers won’t need upwards of $3,000 to own a share.

The company said late Tuesday it will increase its outstanding shares by a 20-to-1 ratio.

“The reason for the split is it makes our shares more accessible,” Ruth Porat, Alphabet’s chief financial officer, said in a conference call with television anchors. “We thought it made sense to do.”

This would lead to lower stock price making it easier for mom-and-pop traders easier to buy shares rather than buying fractional stocks through brokerage firms.

The company plan for 20-for-1 split would reduce the price of Class A shares to roughly $138, based on Tuesday’s closing price of $2,752.88.

“Institutional investors can buy in size and the price per share doesn’t matter,” said Ed Clissold, chief U.S. strategist at Ned Davis Research. “But for a smaller investor, a lower price-per-share makes it easier for them to buy a reasonable number of shares.”