Google's unusual stock split

The company does everything differently. Why shouldn't that include stock splits?

By Motley Fool Investor Beat Mar 28, 2014 3:58PM
On April 3, Google (GOOG) will finally go through with its 2-for-1 stock split, which has been two years in the making. With the incredible run Google has had since it went public, its shares are now trading for well over $1,000 apiece, so a split makes sense at these levels. But, Google's will be no ordinary stock split.

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.The Google logo is seen on a podium and projected on a screen at Google headquarters in Mountain View, Califorina Paul Sakuma/AP

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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Tags: GOOG
4Comments
Mar 28, 2014 5:47PM
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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.
Mar 28, 2014 5:53PM
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"The Pentagon prepares to TRIPLE cyber staff because of threats..."

Only complete IDIOTS would froth in anticipation of a split while the vehicle of the entity is driving full blast toward the cliff. Google is the problem, not the solution. 
Mar 28, 2014 6:02PM
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What with the world's funding disorders, we need another "Bretton Woods Conference" again up here on the Mountain. They had an impromptu minie one here last year; But, they were not congruent to the task. So, let us just make more fake money.
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