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What the Google Stock Split Means

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    NEWSLETTERS

    Google
    Analysts and shareholders want cash-rich Google to offer a dividend, but the company shows no signs of following Apple's lead.

    Google's stock just split into two types, but do investors have a lot to worry about? Apparently not much, according to reports.

    Stock splits have been used throughout history to decrease prices, but it's also used by management to show the company's doing well, according to Forbes. But in Google's case, it's really about keeping control over the company for founders Sergey Brin and Larry Page.

    The stock is split into three classes: the Class A stock which allows one vote for each share; Class B which is largely owned by Brin, Page and executive chairman Eric Schmidt, where owners get 10 votes per share; and now Class C where there are no votes. Class C shares will now trade as GOOG, while Class A shares will trade as GOOGL. Going forward, Class C are the shares that will be bought and sold publicly.
    In the end, this mans that Brin and Page will  "have 468 million votes compared to the 280 million Class A shareholders," according to Forbes. This means the two cofounders will have complete control over the company with 55 percent. Google is still run by a board of directors, but this means it will be difficult to remove either Brin or Page. It also means that the founders can be less concerned about shareholder revolts because shareholders will never gain a majority.
    And while their stock halves in value, shareholders will get twice as many shares, so it's likely there will be little if any money lost.
    There are good and bad to the stock split, but for most small shareholders it will merely be just a change in their portfolio.