Some moon shots are more self-serving than others. On April 2, Google will split its stock for the first time, in an "unorthodox" move to that shareholders fear will benefit cofounders Larry Page and Sergey Brin "at the expense of just about everyone else," reports the Associated Press.
The plan was first proposed more than three years ago, but was delayed "because of staunch resistance." In fact, Google had to settle a shareholders lawsuit and agree to pay up to $7.5 billion if the split doesn't work out the way they planned. The AP says Google's stock wouldn't have exceeded $1,000 for the first time last fall if not for legal skirmish that put off the split.
"It's stupid," Larry Page, Google's co-founder and chief executive, exclaimed about the prospect of splitting the company's shares. "If you own 10 shares at $40 or one share at $400, it's the same thing! You just need to know how to divide."
But Page changed his tune when it came to ensuring his own legacy. All that stock Google throws at employees who get a job offer from Facebook or to compensate the startups it gobbles it? This will fix that in the cofounders favor, explains the AP.
Google's split will create a new class of "C" stock that carries no voting power. One share of C stock will be distributed for each share of voting Class A stock owned as of March 27. Initially, the value of the current stock will be divided equally between the two types of shares. But they will then trade separately with different ticker symbols. Class C shares will get the company's existing "GOOG" ticker symbol, while Class A will change to "GOOGL."
It's not like Larry and Sergey didn't already control the company. Both primary own Class B stock, which comes with 10 times the voting power of Class A, so they already had 56 percent of shareholder votes. But that probably didn't look as good as Mark Zuckerberg's "dictatorial" arrangement.
Nonetheless, the voting clout of Page and Brin has been gradually shrinking, as Google has used Class A stock to reward employees and finance some of its acquisitions during the past decade.
Distributing a new class of non-voting stock will enable Google to continue doling out shares to its nearly 44,000 workers without further undermining the co-founders' power.
[Image via Getty]