Google's unusual stock split
The company does everything differently. Why shouldn't that include stock splits?
On Friday's edition of Stock of the Day, host Erin Kennedy and Motley Fool analyst Brendan Mathews take a look at what makes this split unique. Google will essentially be offering a stock dividend, creating a new class of shares called Class C, and issuing one Class C share for every share of Class A or Class B that shareholders currently own.
Class A shares carry one shareholder vote, Class B carries 10, and Class C shares have no voting rights. The reason for the new Class C shares was to be able to split the stock without further diluting the voting rights of Google insiders, who own the bulk of Class B shares.
So should investors be concerned about this abnormal split? Brendan doesn't think so. While it may not be the most shareholder-friendly move, he trusts Google's leadership to manage well on behalf of shareholders, and isn't particularly concerned here.
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So, which class of GOOG shares will be trading on the NASDAQ exchange after the split? Will it be Class A or Class C shares? If it’s Class C shares, doesn’t that mean any first time buyer of GOOG stock after the split will no longer have any voting rights? Will the Class C shares trade at a discount to the Class A shares?It still sounds to me like someone is getting Scroogled here, and I know it’s not the Class B shareholders.
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3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
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