Alphabet announced its inaugural dividend of 20 cents per share. The tech giant’s board also authorized the repurchase of up to $70 billion in stock. This move follows Meta’s decision to introduce a first-ever dividend back in February. As of March 31st, 2024, Alphabet had an impressive cash and marketable securities balance of $108 billion on hand. Shares jumped by approximately 15% after hours following the news that was disclosed along with better-than-expected Q1 earnings reports. It is crucial to mention here that in the preceding year (2023), Alphabet had also authorized an identically sized repurchase program during a time of extensive cost-cutting and layoffs measures were taken into account by the company.
The dividend will be paid out equally among all classes of shares, including Class B shareholders with supervoting privileges as well as non-voting class C investors (who own most Google stocks). All those who hold their stock before June 10th this year are eligible to receive it during the same month. Sergey Brin, co-founder and owner of more than 730 million Class B & C shares, is in line for a payout worth $146 million while Larry Page (co-creator with over 389 million Class B stocks) will receive approximately $78 million.
Investors have been expecting maturity signs from technology companies as most major tech firms started to lay off employees and reduce expenses in the year 2022, following which share prices soared significantly after these measures were announced. When Meta introduced its first-ever dividend back in February this year, it helped push shares up by more than 14%. Notably, Amazon has never issued a dividend or authorized any significant stock buyback program to date; the largest repurchase made by Amazon was $10 billion that happened just last year. Another forthcoming earning’s statement scheduled on Tuesday from Amazon is worth keeping an eye out for in this regard.
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