Google created a corporate structure under a new holding company and moniker called Alphabet in 2015. But there are still two ticker symbols for Alphabet on the Nasdaq stock exchange—GOOG and GOOGL—and very little price difference between the two. So, what gives?
The short answer is a stock split, but a longer answer is an attempt by the company’s top shareholders—Google co-founders Sergey Brin and Larry Page, along with company chair Eric Schmidt—to retain as much control of the company as possible. The two tickers represent two different share classes. The first group falls into the A-shares category (GOOGL), while the others are C-shares (GOOG).
In this article, we look at these two stocks and what they mean for their investors.
Key Takeaways
Google created a corporate structure under a new holding company called Alphabet in 2015.An April 2014 stock split created Google A- and C-shares under the ticker symbols GOOGL and GOOG, respectively.Shareholders of A-shares receive one vote, while investors who have C-shares receive no votes.Google promised to compensate C-class shareholders if their share prices fell more than 1% below A-shares a year after the split.
What’s the Difference Between GOOG and GOOGL?
Class Inequities
Google split its stock in April 2014, which created the A- and C-share classes. Like any other one-for-one split, the number of shares doubled, and the price dropped in half. However, there is one crucial difference: The A-shares receive one vote, while the C-shares receive no votes. Anyone who held A-shares at the time of the split received an equal number of C-shares, but their voting power did not increase.
If you want a vote at the shareholder meeting, buy the A-shares. They can trade at a slight premium, which shows that the market does place some value on voting power (although the C-shares sometimes trade at a higher price than the A-shares). See the difference in the chart below:
GOOG vs. GOOGL as of Nov. 19, 2021.
Google plans to continue issuing C-shares to finance…
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