Google issues new shares on the US Equity Market

Google Inc. co-founders, Sergey Brin and Larry Page, are strengthening control on their company through a two-year share emission process that was completed yesterday, 3rd of April. Over 330 million new shares of the largest search engine operator were issued on the U.S. equity market, Nasdaq, according to source.

Non-voting shares

New shares are Class C - non-voting, and with this new issue the volume of outstanding common shares of the world’s third-biggest company more than doubles. C non-voting stock will be indexed under the “GOOG” symbol, while Class A shares will be renamed “GOOGL”.

Introducing non-voting shares represents a big advantage for company’s co-founders on the control side. Sergey Brin and Larry Page control now, together, 56 percent of the vote. Subsequently, they are able to issue new stock for different purposes, without actually diluting their voting stake.

Both classes, A and C will be listed in Standard & Poor’s 500 Index (SPX) and are expected to be traded at different prices, with a significant discount for the non-voting C shares compared to voting A shares. In their first day, Google’s C shares traded at $569.74 at 4 P.M. New York’s time, at a discount of $1.76, or 0.3 percent, to the A shares, which closed at $571.50.

No spread

Between Google’s two classes is expected to be little or no spread, as the company guarantees to reimburse Class C holders in case their shares won’t keep up with the existing A stock. Also C shares sales must be equal with B shares sales and, to be able to make exceptions from this rule, co-founders Page and Brin need special approval from independent directors.

Overall, premises are optimistic, as major investors expect the classes to trade in line, eventually.