How a stock split works

Google's parent company, Alphabet, is slated to give all shareholders of record as of July 1 additional shares of stock in their account. If you're not familiar with Google's classes of stock, it can be a bit mind boggling trying to process it all.

The company has the following three classes of stock:

Class A single vote common shares: These shares have been available to investors since Alphabet went public in 2004. They currently trade under ticker $Alphabet-A(GOOGL.US)$.

Class B nonpublicly traded shares: These shares are controlled by insiders and come with 10 votes per share.

Class C nonvoting publicly traded shares: These shares were created in 2014 following an unconventional stock split. They have no voting rights and currently trade under ticker $Alphabet-C(GOOG.US)$.

All three classes of Alphabet stock will be affected in the same way. If the stock split goes through as planned, qualified shareholders will receive additional shares in their account around July 15. However, this will not change the total value of the stock in your portfolio. Your current shares will just be divided into smaller shares, making the four-figure share price more accessible to a broader range of investors.

For instance, let's say you have one share of Alphabet stock that is worth $3,000 before the split. After a 20-for-1 stock split, you now own 20 shares of stock valued at $150 per share. The total value is still $3,000. Your original portion of the pie was just split into 20 different slices.