Why Google Is Issuing a New Kind of Toothless Stock??

                                  

Here’s a philosophical question Google (GOOG) investors can ponder this morning: If you own stock in the tech giant, would you rather have voting rights that are essentially worthless or ones that are literally worthless?

A new “C” class of Google shares will begin trading on Thursday under the familiar GOOG ticker. This stock gives its owners zero votes at the annual shareholder meeting. That sounds bad. In practice, however, the nonvoting shares won’t be so different from holders of Google’s “A” class shares, which get one vote apiece. Both groups are dominated by holders of the only shares that matter: class “B” shares with 10 votes each. Most of those are owned by Google’s founders, Sergey Brin and Larry Page.

Page and Brin aren’t satisfied with the 55.7 percent majority of votes they already control today. As Google issues less-potent “A” shares—to compensate employees or to finance acquisitions—the company’s founders have seen their voting power diluted. Now that the company is issuing the neutered “C” shares to ensure Page and Brin retain control far into the future, they’re free to create as many shares as they like without giving up an iota of their grip on Google’s direction.