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Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.
by wtracy 13y ago
Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.
- Me1000 13y agoYes, the $GOOGL and $GOOG stock will have independent prices.
- drcode 13y agoYes, and Google has committed to pay an extra dividend if the prices diverge too much, because laws.
- guyzero 13y agobecause lawsuits.
- gojomo 13y agoI can't find details on this... do you have a link? (I'm wondering what conditions would trigger this 'extra dividend', and when.)
- drcode 13y agoSorry, can't find it, but one of the recent news stories on the split said there would be a special dividend that kicks in after 2% divergence in price.
- guyzero 13y agoOK my other comment got voted down - the potential extra dividend is not because of "laws" but because of a lawsuit settlement. http://googleclasscsettlement.com/ http://googleclasscsettlement.com/
- drcode 13y agoI agree it's because of the lawsuit, but usually people settle lawsuits because they think the law will rule against them.
- guyzero 13y agoIt's a civil suit, not a criminal suit. It's a negotiated settlement or a judge-imposed settlement. But there's no law that was broken here with a mandated penalty.
- laxatives 13y agoHas a company done something like this before? I've heard of some having a stock that sells for orders of magnitude higher/lower, but not for the same price.
- bbanyc 13y agoNews Corp has a structure like that (NWS/NWSA), as does its spinoff 21st Century Fox (FOX/FOXA).
- guyzero 13y agoSure. 21st Century Fox has FOX and FOXA. There are lots of others but I can't find a comprehensive list for whatever reason.
- caf 13y agoNews Corporation has about 379 million non-voting A-class shares and 200 million voting B-class shares on issue.
- naftaliharris 13y agoYeah, the first thing I thought about when I heard this is that these two shares would be ideal for pairs trading! (Though presumably this will be arbitraged away quickly).
- repsilat 13y ago> Though presumably this will be arbitraged away quickly Only if the market believes they have the same fundamental value. Edit: well, if differences in price stabilise then you might "arb" unequal price movements away, but it's still risky. The best you can probably do is bet generally on corellated movements, not fine-grained one-to-one matching.
- habosa 13y agoCheck out Comcast which has two independent stocks (CMCSA, CMCSK). They move together pretty much, off by less than a dollar right now.
- wutbrodo 13y agoIs the difference between CMCSA/CMCSK similar to the GOOG/GOOGL difference (specifically, limited voting rights) or is it a different case?
- nknighthb 13y agohttp://www.cmcsk.com/faq.cfm http://www.cmcsk.com/faq.cfm CMCSA has voting rights, CMCSK does not. (And there are also Class B shares which are not publicly traded, and have a guaranteed 1/3rd vote share. They are all under the effective control of the current President/CEO, who is the son of the original founder.)