- The gap between GOOGL and GOOG is at its historically low levels.
- With the current trend, voting power of GOOGL would be similar to Class B within the next 7 years.
- Now is the best time to convert your GOOG to GOOGL.
There are several companies on the stock market which trade under different tickers, indicating separate classes of equity with varying rights, benefits and hence different valuations.
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Alphabet (Formerly Google) is one of them. Starting April 2014, founders of Google (GOOGL) decided to split each of the Google stock into two classes, Class A (GOOGL) with one voting power and Class C (GOOG) with no voting power. The other class, Class B with ten voting power, is held by insiders. Since then, there were numerous debates on the effect of this decision on stockholders’ wealth. Google put an end to this concern through a settlement out of the court, promising to limit the issuance of Class C and compensate the owner of Class C in case the gap between GOOG and GOOGL widens within one year of that decision.
This well-written article, Google Class A Vs. Class C: Buy GOOGL, Steer Clear Of GOOG, can give you an overall understanding of the topic.
We can easily graph the prices of each ticker and compare them over the time, but it doesn’t show anything.
However, if we use the close price of each ticker, calculate the percentage difference and then draw the graph, the picture would be entirely different: