How to buy and sell Google shares
Google is one of the most well-known companies in the world. But what is its history, who are its key personnel and how can you buy and sell Google shares? Read on to find out more about Google and how it became the giant it is.
A brief history of Google
Google was founded by Larry Page and Sergey Brin in 1998. The pair came up with the idea when they were working on a solution to find a better search engine than what was available at the time. As a result, Google was developed as Brin and Page set to work creating a search algorithm that would outshine its contemporaries.
The most well-known and arguably most significant algorithm used by Google is called PageRank and, as well as still being in use, it provided the foundation for Google to become the search engine synonymous with the internet that it is today.
Google launched its initial public offering (IPO) on 19 August 2004 in which 19,605,502 shares were issued at a price of $85 per share. Morgan Stanley and Credit Suisse acted as underwriters for the process, and the IPO raised $1.67 billion – which caused Google’s market capitalisation to increase to over $23 billion.
This expansion enabled Google to start looking at acquiring other companies to boost its own growth. Perhaps the most well-known acquisition was YouTube, which Google bought in October 2006 for $1.65 billion in Google stock. Contemporarily, Morgan Stanley has put a $160 billion valuation on YouTube.
In October 2015, Google became the biggest subsidiary of the holding company Alphabet Inc, which was set up by Page and Brin to make the business operations of Google cleaner and more accountable. Other companies and products – aside from Google – which are incorporated under Alphabet are Google Maps, Android, YouTube and Google Chrome.
Trading on Google shares
Trading on Google shares via derivatives is slightly different to investing in them because you won’t own any shares outright. Instead, you are speculating on the direction in which you think Google’s share price will move. You would go long if you expect the price to rise, or you would go short if you expect the price to fall. There are two ways to trade on Google shares – through contracts for difference (CFDs).
If you decide to trade on Google shares, you have the option to trade on leverage. This means you put down a small deposit – known as margin – and you receive full market exposure. But, you should bear in mind that leverage increases your market exposure because your profit or loss is based on the full size of your position, not the deposit. This means that while you can realise a greater profit, you can also incur a much heavier loss.
Trading on Google with CFDs
A contract for difference (CFD) is a financial derivative with which you agree to exchange the difference in the price of an asset – in this case Google stock – from when you opened your position to when you close it. To go long on Google shares, you would buy the market; to go short on Google, you would sell the market.
Google key personnel: who manages the company?
Since Google is a subsidiary of Alphabet, the below table includes directors and chief executive officers (CEOs) of both Alphabet and Google.
|John Hennessy||Independent chairman of the board at Alphabet|
|Lawrence (Larry) Page||CEO and director at Alphabet, co-founder of Google|
|Sergey Brin||President and director at Alphabet, co-founder of Google|
|Sundar Pichai||CEO of Google, director at Alphabet|
|Ruth Porat||CEO of Google, director at Alphabet|
|David Drummond||Senior vice president, chief legal officer and secretary at Alphabet|
|Diane Greene||Director at Alphabet|
|Robin Washington||Director at Alphabet|
|L. John Doerr||Independent director at Alphabet|
|Roger Ferguson||Independent director at Alphabet|
|Ann Mather||Independent director at Alphabet|
|Alan Mulally||Independent director at Alphabet|
|Paul Otellini||Independent director at Alphabet|
|Kavitark Shriram||Independent director at Alphabet|
What is Google’s business model?
The vast majority of Google’s revenue is generated by advertising via its search engine. As well as this, Google’s AdSense places adverts on websites that are listed on its search algorithm. Companies pay Google for these ads, and they can move further up the Google search rankings by doing so – thus increasing the number of visitors to their sites.
In order to facilitate these large advertising revenues, Google needs a lot of users. As a result, Google’s main aim is to connect the world’s information, while making it universally accessible and useful.
In this regard, Google’s business model relies on ensuring that its users feel that the search engine is the best one out there, and it achieves this by constantly scanning and improving its algorithms to fight off competition from other search engines such as Microsoft’s Bing.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.