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<\/figure>\nWhy do you always get two results for Google\u2019s stock (or Alphabet\u2019s, I can\u2019t ever get used to that!)? The ticker symbol GOOG<\/a> and GOOGL<\/a>. Have you ever wondered why Google has two stocks listed in the market? What is the difference between them? And, more importantly, which one should you choose?<\/p>\n If you are a new investor, you might be a bit confused by these different classes of stocks. So, let\u2019s take a look at what these share classes mean for your investment decision.<\/p>\n You probably know Alphabet (Google\u2019s parent company) for its search engine and other services such as Google Maps, Gmail, Google Cloud, Android, and various products. Their headquarters are in Mountainview, California. Since August 19th, 2004, Google has been a public company on Wall Street.<\/p>\n At the time of writing, the price of both these stocks is roughly the same. So it\u2019s not necessarily the price that is different. The only difference between GOOG and GOOGL is in the voting power these stocks provide you with. As an owner of stocks, you sometimes get voting power. That gives you a voice in company matters that are put to voting. Read more about that below.<\/p>\n GOOG is a stock that does not come with any voting power at all. In contrast, GOOGL shares are the ones that will give you 1 vote per share you own. You have the right to participate in the votes at Google\u2019s annual shareholder meetings. <\/p>\n Google created these new shares in April 2014<\/a>. They did a very unconventional 2-to-1 split at that time. The motivation for this split was to \u201cpreserve the corporate structure that has allowed Google to remain focused on the long term.\u201d Google was concerned about retaining their voting rights. You can diminish your voting rights over time if you make many strategic acquisitions and issue stock as part of such deals.<\/p>\n Alphabet Inc. actually does have a third class of shares. But only two of them are traded in the open market:<\/p>\n Larry Page and Sergey Brin own 44%<\/strong> and 42%<\/strong> of the Class B<\/strong> shares, respectively. These shares give them a combined majority vote of 51.2% <\/b>to hold control of the company. They are by far the biggest shareholders of all company insiders and institutional investors. In 2019, they both stepped down from executive roles as CEO and President at Google and Alphabet, but they remain active<\/a> as co-founders, shareholders, and board members of Alphabet.<\/p>\n Technically, GOOGL is the more valuable stock of the two. With this stock, you can make your voice heard and vote in Google\u2019s corporate matters and any other major decisions.<\/p>\n This is the reason why GOOGL will sometimes have a slightly higher price. You might have to pay a small premium for that right. But it is really not a lot of difference in reality.<\/p>\n Most retail investors<\/a> will likely not be able to buy enough shares of GOOGL to really influence Google\u2019s policy. Especially since the Class B shares have a much more influential voting power anyway. You could argue that for this reason, GOOG is the better buy.<\/p>\n Over the decades, companies have embraced dual stock structures. While the most common form is the dual stock, you\u2002can have even more stocks listed. And their main difference is always the privilege tied to them, such as voting rights. Dividends can be another reason to offer separate stocks. This is also why Google has two stocks.<\/p>\n Jay R. Ritter from the University of Florida (also known as Mr. IPO) has collected data on IPOs and their stock class structure in his data paper \u201cInitial Public Offerings: Dual Class Structure of IPOs Through 2023<\/a><\/em>\u201c. Below are the percentages of IPOs that started off with a Dual Class stock structure from 1980 to 2023:<\/p>\n It\u2019s easy to see a trend toward a dual-class structure. If you separate tech stocks out, the trend becomes even more prevalent.<\/p>\n These separations of voting rights from the stock have not gone unnoticed. Many investors don\u2019t like this disconnect. Erik Sherman, a Senior contributor for Forbes<\/a>, writes<\/span>, \u201cExperts in corporate governance\u2014and many investors over the years\u2014have objected to the separation of control from equity. Those with the most money invested collectively to provide the resources a company needs to grow and thrive hold the most risk because they have the most to lose.\u201d<\/em><\/p>\n What are other examples of companies that have dual stocks? Perhaps the most prominent one is Warren Buffett\u2019s Berkshire Hathaway. But there are many more, like Ford Motor, Comcast, CBS, Nike, etc. These companies don\u2019t always trade all of their stocks in the public market. Nike, for instance, only trades its Class B stock. However, Berkshire Hathaway trades both its original Class A (BRK-A<\/a>) and the 1996-issued Class B (BRK-B<\/a>) shares.<\/p>\n You can get a full list of dual-class companies of the Russel 3000 here<\/a>.<\/p>\n You now know why Google has two stocks listed in the market. If you like the idea of exercising your voting rights for your investments, you should always go for the version of the stock that provides the most voting rights. Other than that, there usually isn\u2019t too much of a difference between the stocks.<\/p>\n You now know the difference between GOOG and GOOGL and can make an informed decision should you decide to invest in Alphabet. When investing in individual companies, always ensure your investment portfolio is properly diversified<\/a>. This way you can keep your risk level in check and avoid unnecessary risk in the first place.<\/p>\n In addition to that, I\u2019ve touched on some historical data regarding dual stocks in the stock market. The trend definitely goes towards a dual stock structure that separates equity from voting rights- whether you like that or not.<\/p>\n Disclaimer:<\/strong>\u00a0The information in this blog post should not be considered investment advice or a replacement thereof. They are solely provided for informational purposes. Please consult with a financial advisor for any specific questions on your financial situation. Remember that past performance is not a good indicator of future returns. Also, none of the mentioned stocks are to be understood as recommendations. Don\u2019t buy yourself something solely based on what you read here.<\/p>\nDifference Between GOOG and GOOGL<\/h2>\n
All Classes Of Shares From Alphabet<\/h3>\n
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Which One Is The Better Investment?<\/h2>\n
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![\"Man](\"https:\/\/blog.stockfit.io\/wp-content\/uploads\/2024\/01\/man-using-google-on-laptop.jpg\")
<\/figure>\nWhy Do Companies Like Google Have Two Stocks?<\/h2>\n
Prominent Companies Using Two Stocks<\/h2>\n
Final Thoughts \u2013 Why Does Google Have Two Stocks?<\/h2>\n
Like this:<\/h3>\n