Q& A: Dissecting Google’s Unorthodox Stock Split

Google is poised to split its stock using an unusual method aimed at keeping co-founders Larry Page and Sergey Brin in control of the Internet's most powerful company.

Here's the twist: A new category of nonvoting "C" stock is being created to supplement the voting class of "A" shares that have been trading under the "GOOG" ticker symbol since Google's initial public offering nearly a decade ago.

The majority of non-trading "B" stock that has extra voting power will remain in the hands of Page, who is Google's CEO, and Brin, a top executive who oversees the company's experimental projects. The total number of Google shares will roughly double from the nearly 337 million outstanding as of March 17.

The Class C stock is inheriting the "GOOG" ticker symbol. The Class A stock will switch to a new symbol: "GOOGL."

Google's maneuver is expected to have at least one thing in common with other 2-for-1 stock splits. The share price will probably be cut in half beginning Thursday, the first trading session following the split.

This means Google's Class A stock, which has been trading above $1,100, will probably drop to somewhere between $500 and $600 beginning Thursday. Google expects the Class C stock to trade in roughly the same range, though that's less of a certainty, because some investors may discount the value of the nonvoting stock.

If there is a big spread between the trading prices of the Class A and Class C shares during the first year of trading, Google Inc. will be required to pay an estimated $300 million to $7.5 billion in cash or additional stock to help make up the difference. Google agreed to those terms to settle a class-action settlement alleging the stock split was set up to benefit Page and Brin at the expense of other shareholders.

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