Alphabet Stock
Candlefocus Editor
Alphabet Inc owns a number of subsidiaries and investments, including Google Inc, YouTube LLC, Wing Aviation LLC, and Verily Life Sciences LLC, to name a few. When trading Alphabet stock, investors buy shares of Alphabet Inc (NASDAQ: GOOGL) and not specifically Google or any of its subsidiaries.
Alphabet Inc has two share classes, Class A and Class B, that differ in terms of voting and dividend rights. Alphabet Class A shares are entitled to one vote per share and are eligible for dividends. Alphabet Class B shares have higher voting rights than the A shares and are not eligible for dividends. The B shares are held by the founders, early investors, and top executives.
Class A Overwhelmingly Outweigh Class B
Alphabet Inc shares have a dual-class structure that gives more voting power to the Class B shareholders. Each Class A shareholder holds one vote per share and each Class B shareholder holds 10 votes per share. Despite this difference, the company’s Class A shares overwhelmingly outnumber its Class B shares, making the company’s shares predominantly driven by the Class A shareholders.
Class C Shares
In 2020, Alphabet Inc created a new class of non-voting common stock, Class C shares. Class C shares have no voting rights and were created to give the founders and early investors to get rid of their shares without impacting on their voting control. Class C shares are not eligible for dividends and have the same market liquidity and economic benefits as Class A shares.
Due to the non-voting nature of the Class C shares, the majority of Alphabet’s stockholders remain Class A shareholders, meaning that shareholder influence over company direction is still primarily in the hands of the Class A shareholders.
Bottom Line
Alphabet stock is the publicly traded shares of Alphabet Inc, the parent company of Google. Alphabet Inc has two primary classes of stock, Class A and Class B, which differ in terms of voting and dividend rights, and a newly added Class C stock which is non-voting. Alphabet’s Class A shareholders overwhelmingly outnumber its Class B and Class C shareholders, meaning they’re the majority shareholders with the most influence over company direction. Investors should take into account the differences between the classes of Alphabet’s stock before investing.