“In its quarterly earnings statement today, Google announced it would for the first time in its history be splitting its stock,” Jolie O’Dell reports for VentureBeat. “‘Today, we announce plans to create a new class of non-voting stock,’ Google CEO Larry Page said Thursday in an investors call.”
“Emphasizing that the non-voting nature of the new class of stock would not have much of an impact on how the company is controlled, the search-giant co-founder continued, ‘This proposal will only have an effect on governance in the very long term… We are honored that so many of you have put your trust in us,'” O’Dell reports. “The statement about trust speaks to the voting rights maintained by Google’s founders, who each get ten votes per share of stock they hold. The arrangement is akin to how Facebook CEO Mark Zuckerberg arranged to maintain control of his company and board following the social network’s highly anticipated IPO.”
O’Dell reports, “By splitting its stock just weeks (in all likelihood) before Facebook’s IPO, Google is sending a message to potential investors: Bet on us. We’re a sure thing. We’ve been around for eight years, and we’re only getting more valuable over time… In today’s two-for-one split, each current shareholder will get an additional non-voting share for each share of Google stock he or she currently holds…Typically in a two-for-one split, the share price is adjusted accordingly so that Google shares, which are currently trading at around $650 each, will see a dip down to half that amount, roughly $325 per share.”
Read more in the full article here.
Related article:
Apple announces two-for-one stock split – February 11, 2005
I wonder what would have happened with Apple if Steve would have done the same thing back on the day.
See related article.
BFD.
Apple already did it ( a while ago)… Benefited from it 😉
Hmm, AAPL finally meets and beats the GOOG share price and suddenly google halves the price in a split. Maybe someone doesn’t want to be seen as getting eclipsed?
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You’re statement is non-sensical. The relative share price between the two stocks means nothing. Share price x # shares = Market Value of the company. That means something, not just that one company’s share price is higher or lower.
Agree. I was going to write the same, but you were the fist NB.
Google shareholders love to be disempowered, I guess.
Tim might say on April 24th: we see no need to disempower our shareholders, because we plan to make them happy and not revolt.
Yeah, Google is taking away 50% voting rights from its shareholders. Next time they will split, another 25%. And so on. Nothing more than a devaluation. Some people may be interesting to collect the remaining voting shares. Instead of diluting the voting power among all shareholders, some may get pretty powerful that way.
What a lame, cowardly move. Steve wanted to keep the vision, and just faced the shareholders and said so. Apparently Page and Brin are already afraid that investors won’t like what they’ve got planned.
The non-voting shares thing is BS. What are they afraid of?
I have been trading GOOG for awhile now. I got alerted well before the volume started to pick up and because of this I was able to score a nice profit a few times. The report helped me understand the complete scenario and the pros and cons. It’s always best to buy before everyone else does. Check it out at vippennystocksite.com (Kindly, copy and paste the link in to your browser.)