22 Years of Compounding (and Coping)
Twenty-two years ago, in August 2004, Google officially went public under the ticker GOOG, shattering the traditional Wall Street playbook. Instead of letting big institutional banks handpick who got shares, founders Larry Page and Sergey Brin insisted on a democratic, unconventional Dutch auction, allowing everyday investors to bid on the initial price. Debuting at $85 a share, the IPO raised $1.67 billion and valued the young search engine at around $23 billion. It was a massive gamble that paid off spectacularly, effectively breaking the post-dot-com tech winter and setting the stage for the modern internet economy.
Had an investor bought and held Google stock since its IPO twenty-two years ago, the return would rank among the greatest wealth-creation stories of the modern era. Thanks to multiple stock splits, the original $85 IPO price equates to a split-adjusted cost basis of roughly $2.13 per share. With Alphabet Inc. now trading at around $385, the stock has surged more than 18,000%, transforming the company from a promising $23 billion startup into a $4.68 trillion titan.
To put Google’s impressive run into perspective, it has hugely outpaced the broader market over the same period. The S&P 500 rose from around 1,100 in 2004 to roughly 7,350 today, delivering about a 570% price return, or closer to 920% including dividends reinvested. The Nasdaq Composite, buoyed by the tech supercycle, returned roughly 1,700%. Even so, while that Nasdaq performance would be exceptional in almost any context, it is still dwarfed by Google’s ~18,000% surge, highlighting the extreme power of single-company compounding versus even the most tech-heavy index exposure.
Coincidentally, 2004 was also the last time Arsenal F.C.’s legendary “Invincibles” lifted the Premier League trophy. And much like the investors who held their GOOG shares through two decades of volatility, Arsenal fans spent twenty-two long years believing patience would eventually pay off and can now finally celebrate another league title after a twenty-two-year hold.
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