Coca-Cola (KO -0.34%) went public in 1919, and since that time, the stock has split quite a few times. So, let's take a look at the history and what it would mean for an original Coca-Cola shareholder.
Before we can determine how many shares you'd have if you had bought one share at Coca-Cola's initial public offering (IPO), we need to take a look at its stock split history. There has been a total of 11 stock splits throughout the company's 105-year publicly traded history.
|
Year |
Split |
Total Shares |
|---|---|---|
|
1927 |
1-for-1 (stock dividend) |
2 |
|
1935 |
4-for-1 |
8 |
|
1960 |
3-for-1 |
24 |
|
1965 |
2-for-1 |
48 |
|
1968 |
2-for-1 |
96 |
|
1977 |
2-for-1 |
192 |
|
1986 |
3-for-1 |
576 |
|
1990 |
2-for-1 |
1,152 |
|
1992 |
2-for-1 |
2,304 |
|
1996 |
2-for-1 |
4,608 |
|
2012 |
2-for-1 |
9,216 |
Data source: Coca-Cola.
As you can see, this split history would have led to a massive number of shares over time. One share of Coca-Cola purchased at the time of the 1919 IPO would have multiplied to a staggering 9,216 shares today.
When Coca-Cola went public in 1919, its shares were initially priced at $40. As of this writing, one share of Coca-Cola trades for about $69. But you'd own 9,216 of them. That initial $40 investment would be worth $635,904 today. Not only that, but you'd be bringing in almost $17,900 in dividend income every year.
A great example of long-term compounding
Of course, it's fairly certain that nobody who is reading this actually bought a share of Coca-Cola in 1919 (although some people may have inherited shares that were purchased then). But this is a great example of the long-term power of compound returns. Imagine being able to spend $40 today that will eventually turn into a massive nest egg and $18,000 annual income stream for your children or grandchildren.
