Remember when Google announced plans to split its stock, creating a third class of shares? No worries if you couldn’t; the technology titan announced it in the spring of 2012.
Now the company’s board has finally cleared the way for the stock division â€" just as Google is trading at record highs.
By early afternoon on Friday, shares in the company were trading at $1,180.52. Come April 2, that could fall to about $590.26 or so, as the number of shares doubles.
As DealBook and others have noted before, however, it’s not a simple 2-for-1 split. The new shares will be Class C shares, which carry no voting rights but enjoy the same economic rights â€" meaning dividends, if Google ever pays them â€" as existing Class A shares. The company’s founding duo, Larry Page and Sergey Brin, would still control the majority of the all-important Class B shares that hold 10 times the voting power of Class A shares.
Both the Deal Professor and Andrew Ross Sorkin, the DealBook columnist, have criticized Google for the move, which essentially solidifies the control by Mr. Page and Mr. Brin of what is now a nearly $400 billion company.
Google eventually settled a lawsuit by shareholders who argued that the issuance of nonvoting shares was unfair, though as the Deal Professor noted, the agreement doesn’t address the larger issue of the Class B shares’ voting power.
