Alphabet Stock – What Are the Share Classes of Alphabet Stock?

Alphabet Inc. is an American multinational technology conglomerate company headquartered in Mountain View, California. The company was formed on October 2, 2015, through the restructuring of Google. It became the parent company of Google, as well as several former Google subsidiaries. The stock of Alphabet Inc. is up over 20% since its IPO in October 2012.

Class C shares have enhanced voting rights

If you own shares of Alphabet/Google, you should be aware of the two share classes. Class A shares are reserved for employees, while Class B shares belong to Alphabet executives. Together, these three share classes account for more than half of the voting power of the company. Consequently, these three executives can make decisions for the company without being outvoted by Class A common stockholders. It is essential to understand the differences between these two share classes so you can make a good investment decision.

In April 2014, Google announced a stock split, whereby existing shareholders would receive a C class share for every A share they owned. The stock split allowed Google to issue more shares without affecting the founders’ control over the company. The company decided to compensate Class C shareholders if their stock prices fell more than one percent below the A-shares in a year following the split. However, the split was widely criticised as shareholder-unfriendly.

In addition to their price differences, the shares have different voting rights. Class A shares have one vote, while Class C shares have none. Although the shares of Alphabet have similar characteristics, the Class C shares have enhanced voting rights, which can increase the value of GOOGL. The Class A shares of Google are not accessible to the average investor, while Class B shares are held by the company’s executives. These two shares tend to track similar trends, though GOOGL has been more expensive.

Class B shares have 465,350,190 votes

Although Google has three classes of stock, Class B shares have more voting power than their A counterparts. Founders Sergey Brin and Larry Page own the majority of class B shares. Eric Schmidt and David Drummond are also large shareholders in the company. They each hold about ten percent of the company. Among these owners, several former employees of Alphabet and other executives. These shareholders have the right to vote at the company’s stockholder meetings.

However, super-voting shares are unnatural, and the company’s performance is often inferior to that of its peers. Alphabet’s founders agreed to this practice in advance, and investors were well aware of it. Therefore, it is difficult to complain about it after the fact. However, the company makes it clear in its annual reports. This means that shareholders cannot complain about the stockholder’s voting power.

Alphabet has three classes of shares, Class B and Class C. Class B shares have a voting capacity of 10 times that of the company’s A shares, making the founders able to dictate the company’s policies. The table below shows the market capitalization of Alphabet’s top shareholders in relation to the company’s shares. Interestingly, only two people own ten percent of the company, meaning that they control about half of its votes.

Class C shares could reach $5,000 a share by 2025

With a robust portfolio of many profitable and rapidly-growing segments, Alphabet (the parent company of Google) should be able to sustain its current growth rate for many years to come. Indeed, some analysts believe that Class C shares of Google could reach $5,000 a share by 2025, a figure that’s not out of the question. Let’s take a look at what might make this possible.

A recent article in The New York Times highlighted several concerns of Google executives. They cited growing bureaucracy at the company, a fear of innovation slipping by, and an unhealthy focus on public perception. This comes at a time when Google has added a new CEO, Thomas Kurian, a former Oracle executive. Kurian is expected to improve the company’s performance in the corporate world. He’s also expected to improve Google’s cloud platform’s focus on security, open source software, and data analytics.

In 2023, the price of Google shares could hit $2,500. In 2024, it will rise to $3,000 and then to $4,000 by 2025. By 2028, Google shares will reach $5,190. That’s a 44 percent increase from today. It’s also possible that Google could face a variety of legal proceedings in Texas and Europe. The company is currently subject to a plethora of fines for various antitrust violations.