London Daily

Focus on the big picture.
Saturday, May 31, 2025

Google just made its stock much more affordable

Google just made its stock much more affordable

Not everyone has thousands of dollars on hand to purchase a single share of Google. Soon, investors won't have to.

What's happening: Google parent Alphabet (GOOGL), the third largest public company in the United States, announced after markets closed on Tuesday that it will execute a 20-for-1 stock split in mid-July, making each individual share less expensive and therefore more accessible.

That would reduce the price of Class A shares from $2,753 at Tuesday's close to about $138 per share.

The news has helped send Alphabet's stock up nearly 11% in premarket trading on Wednesday.


In addition to making Alphabet shares more appealing to everyday investors, the move could "set the stage for inclusion into the [Dow Jones Industrial Average]," analysts at UBS noted. The closely-watched index, which consists of 30 US stocks, is weighted by price, so including Google at its current value would lead to big distortions.

Apple was added to the Dow in 2015 after it completed a stock split. (The iPhone maker split its stock again in 2020.)

Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, told me that Alphabet's stock split is "a mark of confidence."

"It shows management is very happy with where they are," she said.

Breaking it down: Well into the pandemic, which has boosted demand for digital advertising as people spend more time online, Google's ad business is still growing at a rapid clip. Ad sales grew nearly 33% year-over-year to $61.2 billion during the three months ending in December.

That helped Alphabet generate a $20.6 billion profit last quarter, trouncing Wall Street expectations.

"The accelerated demand [for online advertising] we saw during the pandemic is, in my view, permanent," Lund-Yates said. "Or at least a large degree of it is."

The results are getting investors excited about a broader set of tech companies that rely on ads. Facebook's Meta, which reports its latest results on Wednesday, is up 4% in premarket trading. Snap and Pinterest, which follow on Thursday, are 4% and 2% higher, respectively.

Lund-Yates thinks tech stocks could remain unstable, though, until there's more clarity on the Federal Reserve's plan to start hiking interest rates. Expectations that borrowing costs will begin to rise soon have roiled the sector.

"I think continued swings are going to be likely," she said. "The Nasdaq in particular doesn't really know where it's going to land at the moment."

OPEC and allies meet with oil prices near 7-year high


Energy prices remain very elevated, and OPEC and its allies face growing pressure to intervene. But is there much the group can do?

The latest: The Organization of the Petroleum Exporting Countries and other top producers like Russia — together known as OPEC+ — will hold a virtual meeting on Wednesday with global crude trading near a seven-year high.

Goldman Sachs has alerted clients that OPEC+ could announce plans to step up production by more than expected instead of sticking to its typical monthly increase of 400,000 barrels per day.

"We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations," the investment bank's strategists wrote.

Brent crude futures, the world benchmark, recently jumped above $90 per barrel due to solid demand and concerns that Russia-Ukraine tensions could disrupt energy flows in Europe. This time last year, they were trading near $55 per barrel.

However, there are reasons to think OPEC+ won't agree to requests from countries including the United States to deviate from its plan. The group is already failing to reach its monthly target of 400,000 barrels per day due to production shortfalls in several countries.

Output from OPEC+ countries increased by only 250,000 barrels per day in December, or 63% of the group's stated goal, according to the International Energy Agency. It attributed the shortfall to reduced supply from Nigeria and Russia, which pumped below its monthly quota.

Saudi Arabia could step up and "quickly and easily drum up spare capacity if it decides it is beneficial," according to Louise Dickson, an oil market analyst at Rystad Energy. Yet it's not clear the kingdom, which benefits from higher oil prices, will choose to go that route.

Should PayPal buy Robinhood?


Robinhood is still losing money, and the trading app reported a drop in the number of users in its most recent quarter. Is it time for the struggling online broker to consider a sale?

That's the question my CNN Business colleague Paul R. La Monica is raising. Robinhood's stock is trading at $14.65 per share, more than 60% below the initial public offering price when the company made its Wall Street debut last year.

The business has already seen massive consolidation. Morgan Stanley now owns E-Trade and Charles Schwab has gobbled up TD Ameritrade. Last week, UBS bought robo-advisor Wealthfront for $1.4 billion.

Paul's thought bubble: Given this trend and Robinhood's recent results, could it catch the attention of a company like PayPal (PYPL), which also has a large base of younger customers and is looking to step up its game in investing?

"I can see them getting bought out or taken private," said Hugh Tallents, a partner with consulting firm cg42. "But they wouldn't be interesting to big banks, Schwab or Morgan Stanley. A wild card could be PayPal."

PayPal's user base, especially the younger adopters of its Venmo service, could mesh with Robinhood die-hards. And last summer, PayPal hired a former executive at Ally Invest to lead a new Invest at PayPal unit.

"Robinhood has over 20 million accounts and the customers are young and active traders," noted John Wu, president of Ava Labs, a cryptocurrency trading platform. "It's an attractive demographic."

Wall Street seems certain that PayPal is willing to spend to grow. There were rumors last year that it made a $45 billion takeover offer for Pinterest. With its current market value of about $12 billion, Robinhood would be a much smaller deal.

Up next


AbbVie (ABBV), Ferrari (RACE), The New York Times (NYT) and Marathon Petroleum (MPC) report results before US markets open. Facebook's Meta (FB), Qualcomm (QCOM) and Spotify (SPOT) follow after the close.

Also today: The ADP report on private payrolls for January posts at 8:15 a.m. ET.

Coming tomorrow: Earnings from Honeywell (HON), Hershey (HSY), Shell (RDSA), Clorox (CLX), Pinterest (PINS) and Snap (SNAP).

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×