Google’s shares are divided into two types, Class A and Class C. Class A shares, traded as GOOGL, confer one vote per share as a typical stock would. Class C shares, traded as GOOG, confers no voting privileges. This dual shares system was done to raise more money selling less useful Class C shares (intended for mutual funds and the like) while keeping control of the company in the hands of those held on to Class A shares (i.e. longtime executives).
Ah, thanks for the info. That’s actually what I suspect is happening with the new fractional shares thing, but the brokerage is the one retaining control.
It’s worse than that, because a company bylaw also gives every GOOG stock a set value of a fraction of a fraction of a fraction of a cent and a binding part of their issuance is the clause that they can demand to buy them back for that price at any time.
Google can drop like pocket lint and instantly buy all GOOG stock back.
This type of thing might be more common than just the famous Google example - apparently lots of valuations reported in media just assume that all shares in a company are equal (fungible, interchangeable) and the actual valuation might be a lot different if it was calculated properly.
Google’s shares are divided into two types, Class A and Class C. Class A shares, traded as GOOGL, confer one vote per share as a typical stock would. Class C shares, traded as GOOG, confers no voting privileges. This dual shares system was done to raise more money selling less useful Class C shares (intended for mutual funds and the like) while keeping control of the company in the hands of those held on to Class A shares (i.e. longtime executives).
Ah, thanks for the info. That’s actually what I suspect is happening with the new fractional shares thing, but the brokerage is the one retaining control.
It’s worse than that, because a company bylaw also gives every GOOG stock a set value of a fraction of a fraction of a fraction of a cent and a binding part of their issuance is the clause that they can demand to buy them back for that price at any time. Google can drop like pocket lint and instantly buy all GOOG stock back.
This type of thing might be more common than just the famous Google example - apparently lots of valuations reported in media just assume that all shares in a company are equal (fungible, interchangeable) and the actual valuation might be a lot different if it was calculated properly.