How to buy and sell Alphabet (Google) shares
As the holding company for Google and other subsidiaries, Alphabet Inc. is one of the largest companies in the world. But what is its history, who are its key personnel and how can you take a position on its shares?
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.
Invest in Alphabet shares
You can invest in Alphabet shares with IG’s share dealing service. By investing in Alphabet shares, you will own them outright, meaning that you will have to pay their full value up front. By owning shares, you can profit through dividend payments, or by selling them if the market price of the shares themselves increases.
To start investing in Alphabet shares with IG, follow these five simple steps:
- Open a share dealing account: it only takes a few minutes to open an IG account
- Log in: once you log in to your IG account, head to your ‘My IG’ dashboard
- Fund your account: deposit some funds before you start investing
- Find Alphabet shares: once you’ve opened, logged in and funded your account, you’ll be ready to buy Alphabet shares. Open the platform for your share dealing account, go to the ‘finder’ panel on the platform, and type in and select ‘Alphabet’
- Choose how to buy: on the deal ticket, you’ll see two tabs labelled ‘at quote’ and ‘on exchange’. At quote is IG’s best price from a range of market makers. On exchange means you are interacting directly with the order book of the relevant exchange
Trading on Alphabet 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 Alphabet stock – from when you opened your position to when you close it. To go long on Alphabet shares, you would buy the market; to go short on Alphabet, you would sell the market.
Trading on Alphabet with spread bets
Spread betting on Alphabet stock lets you bet an amount of money per point of movement in the share price. This movement can be up or down, meaning you can go long or short and your profit or loss is determined by the degree to which your prediction is correct. The more the market moves in your predicted direction, the more you make; but the more it moves against you, the greater your loss.
|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||CFO 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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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