The Case for a Google Split
However, while there may be benefits to increased liquidity for Google -- the stock is currently about one-sixteenth as liquid as Microsoft's -- there also may be some risks, according to Caris analyst Tim Boyd.
As the company's stock price soars, institutional investors eager to point out their shrewdness to customers are piling into the stock, and a lower number of shares on the market could actually help boost the share price. Now, 57% of Google's stock is held by institutional investors, up from 38% at the beginning of the year.
A lot of that institutional growth has to do with the company's original decision to choose Main Street over Wall Street during its IPO. But with the tide turning the other way, Google is now on par with Microsoft and eBay, whose stocks are owned 55% and 63% by institutions, respectively.
As its mix of individual and institutional investors comes into line with those of other tech companies, Google will once again return to exploring what it can do to woo the individual investor. And as it share price keeps reaching new highs, a split may be just the answer.
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