April 2 - Google's share price will drop by roughly half tomorrow as the result of a stock split. One analyst thinks it's worth more than that. Fred Katayama reports.
Don't be surprised tomorrow when you see the four-digit price of your Google stock cut roughly in half. No, your Google Glass isn't seeing things. Google is splitting its stock 2-for-1. That doubles its share count. CRT Capital is betting that Google's stock will be worth a little more than half of its pre-split level. It revised its price target to $710 from $1392 to adjust for the split and account for the pending sale of Google's Motorola Mobility business. CRT analyst Neil Doshi, who is sticking with his buy rating, praised Google's leadership, saying, "We believe Google has one of the strongest management teams in the industry." And that management team of Larry Page and Sergey Brin will retain firm control of the company with their Class B shares. That's because the new shares Google is issuing, the so-called Class C - have no voting rights unlike Class A and B. And the B shares held by Page and Brin offer 10 times more voting rights than Class A. So, while the new shares will be more affordable for the little guy, buyers won't have a say. Investors don't seem concerned, driving up Google shares on the eve of the big share drop and getting their last dose of the $1000 price range.