Alphabet, which is the parent company of Google, announced for the first time the payment of dividends to shareholders and approved a program to buy back its own shares for a significant amount.
Alphabet dividends
First payments to owners
The board of directors of the technology giant authorized the payment of dividends to all shareholders in the amount of 20% of the value shares In addition, the company decided to implement a program to buy back its own securities in the amount of up to 70 billion US dollars.
According to the information, the payments will apply to all classes of Alphabet shares, including those that give their holders the right to vote (Class B) and without such right (class C). However, most investors own Class A shares.
All shareholders registered on June 10 will receive dividends within the same month. In particular, co-founder Sergey Brin, who owns more than 730 million shares of class B and C, will have a payout of $146 million. For another co-founder, Larry Page, who owns 389 million shares of class B, the dividend will reach $78 million.
A positive assessment of the move
According to Investing senior analyst Thomas Monteiro, quoted by Reuters, dividend payments and share buybacks in the face of strong earnings growth are "a very smart strategy for the search giant, which is experiencing hard time". In the first quarter of 2024, Alphabet posted better-than-expected revenue, profit and advertising revenue.
According to the report, the company's sales in January-March reached $80.54 billion, and net profit increased to $23.66 billion. After the results were released, Alphabet's share price jumped by almost 16%, increasing the market capitalization of the technological giant by approximately $300 billion to more than $2 trillion.
Glossary
- Alphabet is an American multinational technology holding company founded in 2015 as the parent structure for Google and a number of other enterprises.
- Sergey Brin is an American entrepreneur and computer scientist of Belarusian origin, co-founder of Google.
- Larry Page is an American computer scientist and Internet entrepreneur, co-founder of Google.
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Discussion of the topic – Google's parent company is taking a historic step: first dividends and a large-scale share buyback
In an unprecedented move, Alphabet Inc., Google's parent company, declared its first-ever dividend of 20% per share and authorized a share buyback of up to $70 billion.
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Михайло
Wow, how interesting! Now a giant like Google will pay dividends. It seems that the company has reached a new level of stability and confidence in the future. 😎
Ганна
Agreed, Mykhailo! Paying dividends is always a good sign for investors. In addition, buying back shares for 70 billion dollars is quite an investment in one's own company. 💰
Петро
It is interesting that such a decision was influenced by the successful reporting for the first quarter. An increase in net income of almost $24 billion is truly impressive! Google is clearly confident in its capabilities. 🚀
Іван
Be that as it may, the founders of the company, Sergey Brin and Larry Page, will receive solid payouts of $146 million and $78 million, respectively. For them, this is a truly significant event after so many years of work. 💸
Григорій
That's nonsense, dividends are just a way to pay money to those who do nothing! It would be better to invest these billions in new technologies and developments. Phew, it's all delusional! 😠
Ганна
Grigory, don't be so sharp! Dividends are a reward for shareholders who have invested in the company. In addition, share buybacks can be beneficial for attracting new investments in the future. 💭
Михайло
I agree with Anna. Paying dividends is not only about money, but also about the ability to manage capital and investments. And Google clearly knows what it is doing! 💹
Петро
If you look more broadly, this decision demonstrates that the technological giants have already reached a certain maturity. They are ready not only to invest in development, but also to reward their shareholders. The era of startups is gradually becoming a thing of the past! 🆕