Newly split Google stocks climb on first day

2 classes of the company's shares begin trading and see small gains.

By MSN Money Partner Apr 3, 2014 11:57AM
Credit: © Paul Brown/Alamy
Caption: Google Headquarters in Mountain View, Silicon Valley, Calif.By Benjamin Pimentel, MarketWatch

Two classes of Google shares created after a 2-for-1 stock split rose sharply as they began trading Thursday.


The new class of non-voting Class C shares (GOOG) trading under "GOOG" climbed 2.5 percent to $580.89, while Class A shares (GOOGL) trading under the new ticker "GOOGL" gained 2.4 percent to $582.41. 


Shareholders received the two shares for every Class A stock they owned.


Google implemented the stock split, which became official after Wednesday's closing bell, as a way to make it easier for founders Larry Page and Sergey Brin maintain control of the Internet giant.


At least two analysts reaffirmed a buy rating on the stock given Google's dominant market position and robust financials.


"We remain positive on shares of Google given our expectations for continued search strength, strong mobile position, and an attractive valuation," Raymond James analyst Aaron Kessler told clients in a note in which he kept an outperform rating. Kessler set a price target of $660.


Topeka Capital's Victor Anthony also maintained an outperform rating on Google, telling clients, "While there is no change to net income from the share split, we are increasing pro-forma earnings estimates to reflect the move of Motorola operating losses to discontinued operations. In addition, we are doubling the number of shares outstanding due to the split."


Anthony set his 2014 earnings per share estimate at $27.30 and his 2015 earnings per share target at $30.94. He maintained an outperform rating with a split-adjusted $675 price target.


The tech sector also got a boost from shares of Pandora Media (P), which were up 2 percent after the Internet radio company reported stronger listener gains in March.


But the sector was weighed down by shares of Twitter (TWTR), which were down nearly 2 percent, and Microsoft (MSFT), which was off 1 percent. Hewlett-Packard (HPQ) and Apple (AAPL) were each down a fraction. (Microsoft owns and publishes Top Stocks, an MSN Money site.)


The Nasdaq Composite Index ($COMPX) was off 0.2 percent at 4,266. The Morgan Stanley High Tech 35 Index (MSH) shed a fraction, while the Philadelphia Semiconductor Index (SOX) climbed nearly 1 percent.


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