Google Investing? Share Classes Explained

December 12, 2018
621 Views

Alphabet Inc., the parent company of Google, is one of the most popular investments for those looking to hold a sturdy growth stock on the American market. However, there is often some confusion when it comes to the two ticker symbols used by the company.

When Google restructured under its Alphabet holding company, it also initiated a stock split. Effectively, the number of available individual shares doubled, while the price dropped by half. Investors can choose to purchase on either side of the split.

Both GOOG and GOOGL shares trade on the NASDAQ. While prices are usually quite similar, the shares themselves are quite different.

The Difference Between GOOG and GOOGL Shares

GOOGL Class A shares: These are traded on the public market and are provided with voting rights. This means that if you invest on this side of the market, you will have some say in the high-level decision-making process at Alphabet.

Voting rights can be used at the annual shareholder meeting, although the exact terms can vary depending on the company strategy at the time. Typically, voting is carried out for major business decisions like acquisitions and mergers, changes at an executive level (including nominations and compensation), and potential future stock splits.

Class A shares are favored by investors because of their voting rights, which means they usually have a price premium over Class C shares.

GOOG Class C shares: These are also traded publicly but come with no voting rights. In theory, these are the better option for investors who want minor holdings and are not concerned about voting on future business decisions. However, the price similarity between classes means that Class A shares are still preferred in most cases.

What is the Price Difference Between

Google Share Classes Today?

As of pre-market December 12, 2018, Class A shares trade at $1,065 on the NASDAQ. Class C shares trade slightly lower at $1,055. That’s a difference of just 0.94%.

If you are interested in Alphabet stock, then Class A shares are the most compelling. The minor price difference is offset by the added value of voting rights. Even if you don’t intend to exercise voting rights, the overall higher market desirability makes Class A shares a better bet for the long term.

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