Google’s stock price topped $800 for the first time on Tuesday amid renewed confidence in the company’s ability to reap steadily higher profits from its dominance of internet search and prominence in the increasingly important mobile device market.
The milestone comes more than five years after Google’s shares initially hit $700. Not long after breaking that barrier in October 2007, the economy collapsed into the worst recession since World War II and Google’s stock tumbled into a prolonged malaise that eventually led to a change in leadership.
Besides enriching Google’s employees and other shareholders, the company’s resurgent stock is an implicit endorsement of co-founder Larry Page. He replaced his managerial mentor, Eric Schmidt, as CEO in April 2011. Google’s stock has risen by about 35 per cent since Page took over. By contrast, the benchmark Standard & Poor’s 500 index has climbed by 15 per cent over the same stretch. Most of Google’s gains have occurred in the past seven months.
In morning trading, Google’s stock was at $802.34, up 1.2 per cent, or $9.45.
The significance of crossing the $800 threshold is largely symbolic. If Google had its way, the stock wouldn’t even be priced near these levels. The company, which is based in Mountain View, California, had hoped to split its stock last year in a move that would have at least temporarily halved the trading price by doubling the total number of outstanding shares.
But the proposed stock split was put on hold until Google resolves a shareholder lawsuit alleging that the stock split unfairly cedes too much power to Page and fellow co-founder Sergey Brin.