| Ted Late
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Search giant Google – or rather its parent umbrella company Alphabet Inc. – offers two different classes of stocks: GOOG and GOOGL. GOOG shares are classified as Class C shares, giving stockholders an ownership stake in the company but granting no voting rights. GOOGL shares, on the other hand, are Class A shares, which give holders ownership stake in the company in addition to voting rights.
In this article, we are going to examine all the intricacies surrounding the two types of Alphabet shares and compare GOOG vs GOOGL stock.
Key takeaways
- Alphabet Inc., Google's parent company, offers two stock types: GOOG (Class C) and GOOGL (Class A).
- GOOG provides ownership but no voting rights; GOOGL offers ownership along with voting rights.
- Market movements for both classes are closely aligned, with a 1% to 2% price separation between the two.
- GOOG trades at a slightly lower price due to the absence of voting rights, potentially attracting investors inclined towards growth potential.
- In addition to Class A and Class C shares, Alphabet has Class C shares as well, which are owned by the company’s insiders and are not publicly traded.
What is the difference between GOOG and GOOGL stock?
Google’s Class A shares (GOOGL) and Class C shares (GOOG) represent different categories of ownership in the company. The main difference between the two is that Class A shares have voting rights, while Class C shares do not. However, there are additional differences between the share classes you might want to consider if you are planning to invest in Google.
It is worth noting that the company has three stock types – the aforementioned Class A and Class C, as well as Class B, which are not publicly traded and belong to Google’s insiders, including founders Larry Page and Sergey Brin.
GOOG stock
- Share Type: Class C
- Voting rights: None
- Shares Outstanding: 5.87 billion (according to the company’s latest 10-Q)
Google Class C shares (GOOG) represent a type of stock offered by Alphabet Inc., the parent company of Google. The main distinction between Class A and Class C shares lies in their voting rights. Class C shares do not provide voting rights. For this reason, Class C shares often trade at a slightly lower price compared to Class A shares because of this difference in voting power.
Investors considering Class C shares might find them appealing if they prioritize investment in the company's growth potential without necessarily seeking a say in corporate governance matters. These shares could be more affordable to purchase compared to Class A shares while still offering ownership in Alphabet Inc.
Check out our in-depth guide to learnhow to invest in GOOG.
GOOGL stock
- Share Type: Class A
- Voting rights: One vote per share
- Shares Outstanding: 5.94 billion
Google Class A shares (GOOGL) are another type of stock offered by Alphabet Inc. These shares entitle shareholders to ownership in the company and carry voting rights, which distinguishes them from Class C shares.
Each GOOGL share carries a single vote, allowing shareholders to have a direct say in corporate decisions during shareholder meetings. This voting right provides Class A shareholders with a level of influence over company policies and strategic directions. This benefit comes at a slight premium, as GOOGL stock usually trades a couple of percentage points higher than GOOG shares.
Check out our in-depth guide to learn how to invest in GOOGL.
Alphabet’s Class B shares
- Share Type: Class B
- Voting rights: 10 votes per share
- Shares Outstanding: 882 million
Class B shares are only owned by Alphabet's insiders, including its founders and employees. They do not trade on public stock exchanges. Class B shares have 10 votes per share, while Class Ahave 1 vote per share and Class C shares have none.
The most obvious reason why Class B shares are not publicly traded is because Alphabet's founders and employees want to maintain control of the company. By owning a majority of the Class B shares, they have a majority of the voting power in the company. This allows them to make decisions about the company's future without having to worry about the opinions of public shareholders.
Should you buy GOOG or GOOGL?
The decision between buying GOOG or GOOGL basically comes down to whether you value having voting rights or not. GOOGL grants you the right to one vote per share, while GOOG grants you none. Both stocks move in the same direction in the market, with respective prices typically separated by 1% to 2%.
This close market movement is reflected in our algorithmically generated GOOG price prediction and GOOGL price prediction as well, with the algorithm forecasting virtually the same market movements in the next 12 months for both share classes.
The bottom line
The choice between investing in GOOG or GOOGL shares hinges fundamentally on the significance you place on voting rights within Alphabet Inc. Both classes of shares allow ownership in the company, yet GOOGL (Class A) provides shareholders with the added advantage of voting rights, whereas GOOG (Class C) lacks this privilege.
GOOG shares, absent of voting rights, tend to trade at a slightly lower price compared to GOOGL shares due to this distinction. Investors favoring growth potential over direct involvement in corporate decisions might find GOOG shares more appealing.
Google is widely regarded as one of the most promising companies in the stock market, thanks to its dominant position in the online search and advertising market and robust AI features. If you want to learn more about other companies with high potential, check out our list of the best AI stocks to buy.
