Intro
As one of the most recognizable names in the tech industry, Google has been a popular investment choice for many. However, with two different classes of stock available – GOOGL and GOOG – it can be difficult for investors to decide which one to pick.
In this article, we'll take a closer look at both stocks and help you make an informed decision about which Google stock to buy.
THE ESSENCE
- Google has three different classes of shares: class A, B and C
- Only A (GOOGL) and C class (GOOG) are traded publicly; B is for company insiders
- The difference is in voting rights: class A has one vote, while class C has no vote at all; B has 10 votes
- GOOGL and GOOG shares have been trading at essentially the same price in recent years
- As the voting power of retail investors is mostly theoretical, a good approach is to buy whichever is cheaper
GOOGL vs GOOG stock
What is the difference between GOOGL and GOOG shares?
GOOG and GOOGL are stock ticker symbols for shares in Alphabet Inc., the parent company of Google. The main difference between GOOG and GOOGL shares is that they are different classes of Google stock, with different voting rights:
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GOOGL shares are class A shares and have one vote per share
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GOOG shares are class C shares, and have no voting rights at all
This means that shareholders of GOOGL have more control over the company's decision-making process compared to GOOG shareholders. Nevertheless, both classes of stock represent ownership in the same underlying company, Alphabet Inc, which is the owner of Google.
Additionally, GOOGL shares have traditionally been slightly more expensive than GOOG shares because of their voting power. However, this difference has narrowed, and even turned around in recent years, with GOOG shares trading slightly higher than GOOGL at the time of writing. You can check the current share price of GOOGL and GOOG shares in the chart embedded above.
Which is better to buy, GOOGL or GOOG? – Gyula's expert opinion
I wouldn’t say buying one is better than the other; the only difference is that with class A shares you can vote at stockholder meetings. However, usually a retail investor does not have enough shares to significantly change the outcome of a vote, as company insiders owning class B shares have more than 50% of the votes anyway.
Since the price difference between class A and C shares has been minimal in recent years, and voting power is more theoretical than practical, a good approach may be to buy whichever share is lower at the time of your trade.
GOOGL vs GOOG stock
Google/Alphabet's share class structure
Google (Alphabet Inc.) has three different share classes: A, B and C class shares.
You can see the main differences in the table below, after which we will go a bit more into the details.
| Symbol | Publicly traded | Votes per share | No. of shares (million)* | Total voting power | |
|---|---|---|---|---|---|
| Class A shares | GOOGL | Yes | 1 | 5,956 | 40.3% |
| Class B shares | - | No | 10 | 883 | 59.7% |
| Class C shares | GOOG | Yes | 0 | 5,968 | 0% |
*as of Jan. 26, 2023 (SEC filing)
Class A shares (GOOGL)
Class A shares (GOOGL) have voting rights, with owners having one vote per share. Also known as common stock, these are the most common type of Google shares for regular investors to buy.
Owning a class A share is the only way for an average investor to participate at Google's shareholder meetings and be able to vote on decisions. All class A shares combined represent around 40% of votes in the company.
Class B shares
Class B shares in Google are not publicly traded, and thus do not have a stock ticker symbol. They are primarily held by the company's insiders, including founders Larry Page and Sergey Brin, as well as former CEO Eric Schmidt and a few other directors.
Each class B share has 10 votes, making these shares much more valuable than A or C class shares. This means that the 883 million class B shares have around 8.88 billion votes in Google, accounting for ca. 60% of the company's voting power.
Class B shares were created in 2012 to help keep control of the company's decision-making power in the hands of its founders and insiders. Because of their concentrated voting power, class B shares are typically held by insiders for the long term and are not sold frequently.
Class C shares (GOOG)
The class C shares (GOOG) have no voting rights. They were created in 2014 following the first stock split of Google shares to provide a way for the company to issue new shares without reducing the voting power of its existing shareholders. This class of stock is often used for employee compensation, acquisitions, and other corporate purposes.
All three classes of Google shares (A, B and C) represent ownership in the same underlying company, Alphabet Inc, the owner of Google. Because of their different voting rights, the prices of the two publicly traded classes of shares (A and C) have sometimes differed, but in general they tend to move in tandem.
GOOGL vs GOOG stock
What do you need to know about Google voting shares?
Google voting shares refer to the publicly traded Class A shares (GOOGL) of Alphabet Inc. that carry one vote per share.
Holders of Class A shares have the right to vote on corporate matters such as the election of directors, executive compensation, mergers and acquisitions, and other important company decisions. The voting power of Class A shares makes them more valuable than Class C shares (GOOG), which have no voting rights.
However, as class B shares (which are not available to the public) carry 10 times the voting power of class A shares, individual investors who hold a relatively small number of GOOGL shares may not have much practical influence over the company's decisions.
Buying stocks for the first time?
If you have your eye on Google shares as your first stock trade ever, use our dedicated step-by-step guide to make the process smooth and easy. We'll help you invest in stocks on your own in no time!
