In January, Google Inc (NASDAQ:GOOG) announced that its board of directors approved a stock split wherein the search engine giant will issue a Class C share dividend for every Class A share and Class B share owned by its shareholders on record as of March 27.
Following the stock split, the search engine giant’s Class C shares will be trading under its original ticker symbol “GOOG) and its Class A shares will be trading under the ticker symbol “GOOGL.”
The shares of the search engine giant closed at $1,135.10 per share on Wednesday. Since the stock split took effect today, the stock price of the new Class C shares of Google Inc (NASDAQ:GOOG) was adjusted to $567 per share, and the new Class A shares of Google Inc (NASDAQ:GOOGL) was adjusted to $568.07 a share.
The new Google Inc Class C shares (NASDAQ:GOOG) has no voting right while each of the Google Inc Class A shares (NASDAQ:GOOGL) carry one voting right. The search engine giant’s Class B shares, which carry ten voting rights per share are restricted and held by insiders. The search engine giant implemented the stock split to strengthen the control of co-founders Larry Page and Sergey Brin in the company.
Rolfe Winkler of the Wall Street Journal explained, “By holding super-voting Class B shares, Page and Brin controlled 56% of Google as of last April’s proxy filing. The founders have seen their grip erode over the years as Google continued to issue Class A shares to finance acquisitions and pay employees with stock.” The search engine giant decided to create a Class C share to resolve the problem
“I think the mutual fund guys will want to hold the stock with voting rights. The large institutional investors and the hedge fund guys, or the people who have short holding periods, they don’t care about voting rights,” commented Sameet Sinha, analyst at B. Riley & Co.
The Google Inc Class A shares (NASDAQ:GOOGL) rose 0.60% to $571.50 per share and the Google Inc Class C shares (NASDAQ:GOOG) went up 0.48% to $569.74 per share today.