Google’s stock split explained

Google’s stock split explained

Alright, so you’ve seen Google’s earnings, but what about that stock split they announced? Here’s what’s going on, briefly, and I hope, simply.

Google is going to issue a stock dividend to all shareholders. For every share of voting class A or B stock (the stock that currently exists in the hands of normal investors, and employees/founders) that an individual owns, they will receive a single share of the new class C stock. This share has no voting rights.

Another conference. “Great.”

This one’s different, trust us. Our new event for New York is focused on quality, not quantity.

Therefore, every investor will have the number of shares that they own double, effecting a 2 for 1 split. Google noted that this is something that has long been requested by investors. As the company’s stock is over $600 in today’s trading, a split is reasonable, and may help diversify the firm’s investor makeup.

Google promised to release a filing in the near future that will contain all the critical details. Finally, Google has instituted a program for Eric, Larry, and Sergey that will keep their voting and economic rights in line. They call it a ‘stapling agreement.’ Essentially, it means that those three can’t dump class C shares, leaving them with a decreased economic interest in the firm, and a proportionally larger voting interest. This is to keep the system fair, in other words.

Google’s new class C stock will trade on the NASDAQ under a different ticker symbol than the company’s normal stock, which trades under the symbol ‘GOOG.’ If you have any more questions, or want a bit more information, head here and scroll to the postscript.

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