If you’ve already invested in Google shares as of March 27th, then today is a red-letter day for you because it means your shares double in number, now owning a Class C share for every Class A share you have, a two-for-one if you will. This has happened because Google’s Board of Directors approved a stock split back in January, with the consequence that today you will see Google’s shares trade under two separate tickers – GOOGL and GOOG. Class A shares will trade under the new GOOGL moniker, whilst Class C shares will trade under the traditional GOOG ticker. In case you are wondering, Class B shares are non-tradable, and owned by people such as Sergey Brin and Larry Page who helped found Google in the first place. Incidentally, the owners of the non-trading Class B shares will also receive one Class C share for every Class B share owned.
What does this mean to the average shareholder? Not a great deal other than suddenly owning two different Google shares instead of just the previous one. Regular shareholders aren’t about to get expanded control or rights over the search giant actions. And whilst each Class A share will still have a one vote value, the Class C has no voting rights whatsoever. And the Class A’s voting rights are only really useful if you own a substantial amount of them. It’s expected that only non-voting Class C shares will be issued from this point forward, helping to maintain the Founders (Sergey Brin and Larry Page) ability to retain control over the company, avoiding the dilution of Class B shares. The stock split also gives Google more options in its ability to offer stock options, or using their stock as currency to purchase other companies.
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Google has previously stated that the earnings per share will be roughly half of the previous quarter, due to the net earnings being divided into twice as many shares. So basically owning a Class A and a Class C share will be worth roughly what the original share was worth, just twice the paperwork. It’s widely thought that the stock split will be a good move for investors, becoming more accessible to retail investors and possibly day-traders. Shares under the GOOG ticker saw a 2% rise over yesterdays close at $1133.96, with GOOGL shares also on the up.
Do you own shares Google? If so, do you believe the stock split is beneficial to you? Does the split have any real impact on you at all? Are you, like me, disappointed that the new ticker name isn’t El Goog? Let us know in the comments or via our Google Plus page.