Google Incorporated has defined itself as one of the leading technology companies of the world. As of July 27, 2015, class A and C shares of Google have a combined market capitalization of $440.47 billion. Google is the second largest company, right behind Apple Incorporated, in the world by market capitalization. Google has a market capitalization that is over 10 times larger than some of its competitors, such as Yahoo Incorporated, which has a market capitalization of $35.16 billion. Google's market capitalization is also 1.67 times that of social media giant, Facebook Incorporated (FB), which has a market capitalization of $264.45 billion.
If you had invested $1,020 at its initial public offering (IPO) price of $85, you would have been able to purchase 12 shares. After its stock split, you would have 12 Google Incorporated class C shares (GOOG) and 12 Google Incorporated class A shares (GOOGL).
If You Invested in Google After Its IPO
Google, the world's number-one Internet search engine, made its long-awaited filing for an IPO with the Securities and Exchange Commission (SEC) on April 29, 2004. Prior to its IPO, Google generated $961.90 million in revenue during 2003. The company sought to raise $2.7 billion in its IPO.
Google held its IPO on Aug. 19, 2004. The company went public at $85, sold 22.5 million shares and raised over $1.9 billion. Shares of Google rose 18.05% to $100.34 at the close on its IPO date. If you had been able to purchase Google's shares at $85, you would have acquired 12 shares, or $1,020 divided by $85, before the company split its stock.
2014 Stock Split
Since you would have owned 12 shares of Google Incorporated prior to the record and ex-stock dividend dates, you would have been able to participate in its stock split. The company distributed a 100% stock spinoff, which is similar to a two-for-one stock split.
Google announced that the company would be creating a new class of non-voting capital stock, or class C stock. Google distributed shares of its class C stock in the form of a dividend to stockholders with a dividend record date of March 27, 2014 and dividend payment date of April 2, 2014. The new class C shares began trading on April 3, 2014, the ex-dividend date.
Following this stock spinoff, you would have received one Google Incorporated class C share for each share of Google Incorporated class A you owned. You would have had 12 shares of each stock. After the stock split, you would have also had 12 voting rights, since each class A share of Google has one vote each.
Present-Day Value From a Google IPO Investment
As of July 27, 2015, Google Incorporated class A stock closed at $658.27 per share, while its class C stock closed at $627.26 per share. Currently, the initial investment of $1,020 would be worth $15,426.36, which is 12 shares multiplied by $658.27 per share plus 12 shares multiplied by $627.26. The return on investment (ROI) from these shares purchased at Google's IPO would be 1,415.39%.
Comparing the ROI from Facebook
The ROI generated by investing at the time of Google's IPO is nearly 10 times the ROI that would have been generated by Facebook if you invested $988 right after Facebook's IPO. Assuming you were able to purchase shares of Facebook at its IPO price of $38, you would have 26 shares. As of July 27, 2015, Facebook closed at $94.17 per share, and your investment would have been worth $2,448.42. Your ROI would have been 147.82%.