Post-split, why would anyone buy non-voting shares when voting shares trade at the same price? Won't lack of demand for non-voting shares push the price down?
Seems to me the right strategy is to sell the non-voting shares as soon as you get them, and use the cash to buy voting shares if you still want as much GOOG.
Is there an attraction to non-voting shares I'm missing? (Besides for Sergey and company, of course.)
Actually, current shares you own has pretty much less voting power than what Larry, Sergey and Eric own (class B).
it is the same thing. This is a really 2 for 1 stock split.
Larry/Sergey/Eric will not sell the class C shares unless they sell the same amount of class B shares at the same time. Go and read the ER.
They have been in this way to keep control of the company. Actually that is more important for the long term stable growth of the company.
By the way, Facebook is doing the same thing recently by enhancing the control of the company by Mark himself.
Unlike yahoo, it is one example on the other side. Jerry and Filo does not have the majority voting power, making them hard to control the company.
its kind of unethical, basically asking for a lot more money from the market, but not really giving a share in the company. With these structures they are bypassing the intent of opening a company to public shareholders in exchange for money.
nobody is complaing cause these companies are all hype\growth\spec... buts its really creative wallstreet screwing the average investor
cap gain which will reduce your cost basis of the remaining shares, unless the IRS treats them as a different entity with a zero cost basis. In that case google has really screwed you since its all cap gains
seems to me I know of a great money making strategy. The second the C shares open for trading all retail will start selling the stock and i'm sure it will create quite a spread between the A shares then you will have the buyers waiting there to pick up the cheap shares. Mutual funds don't care what class the stock is. They know that the 2 shares will trade ~1% of each other. Somedays the C shares will have better days some days the A shares will be better, but it doesn't change the value of the shares and what they are worth to investors. They will buy it if it's a bargain and you will creating a sweet arbitrage.
The class A shares already effectively have no voting power, since the existing dual class structure gives Larry, Sergey, and Schmidt control of 68% of the votes.
So, I'd argue that lack of voting power is already priced into existing Google common stock. No large/serious investor is under the impression that they have control through their shares today.