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Sergey, Larry and Eric already have majority control of the company between them, so what difference does the stock split make? I can understand disapproving o
by waqf 15y ago
Sergey, Larry and Eric already have majority control of the company between them, so what difference does the stock split make?
I can understand disapproving of the dual-class stock structure on principle, but I don't see why people are suddenly getting upset now.
- Zombieball 15y agoI am quite inexperienced in the world of stocks but out of curiosity is it possible to see the relative power of current shareholders somewhere (e.g. Larry owns 10%, Mr. X owns 3%, etc.)?
- jedberg 15y agoIt's not totally straightforward. You can start here: http://finance.yahoo.com/q/ir?s=GOOG+Insider+Roster http://finance.yahoo.com/q/ir?s=GOOG+Insider+Roster But if you look there you'll see that Sergey currently owns no shares, probably because they're all in a trust.
- dpark 15y agoThe split doesn't actually make a difference. What makes a difference is the stock they issue after the split. They want to create this new class specifically so that issuing new stock will not dilute their control (even though it will dilute everyone's ownership). Basically, they found that the current dual-class structure isn't sufficient to guarantee control if they keep diluting when they issue grants to employees or pay for acquisitions with new stock. So how do you fix that? Well, you could buy up stock equal to the new stock you issue, but that costs cash. Instead you could just stop issuing stock that come with voting rights, which is what they're doing. Keep issuing stock, but just don't grant voting rights with it. If the new stock works, that will be most or even all of what they issue going forward, guaranteeing that they will maintain majority control so long as they don't sell (too much).