GOOG vs GOOGL? Which stocks to choose?

07.05.2019 / 18:11

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If you ever considered investing in Alphabet, the parent company of Google, you must have noticed that their shares have two quoting symbols: GOOG and GOOGL. Which is better for purchases? Is there a difference between the two types of stocks?

In 2015, as part of the restructuring, a new company named Alphabet, which has become a parent company of Google and all other sub-companies, was created.

Today, Alphabet, a California-based conglomerate, is one of the largest companies in the world. It is the leading company listed by the US Treasury Financial Index - S & P500.

The main reason for the GOOG / GOOGL split lies behind the voting rights. Primarily, shareholders have the right to vote on important issues raised by the board of directors, and resolving these issues can seriously affect business decisions and operations. To ensure control of the founders of the company, Google divided its publicly traded shares into two: Class A GOOGL shares and Class C GOOG shares. The strategy is simple: Those who hold GOOGL shares will still have the right to one vote per share and the owners of GOOG shares do not have voting rights. That is why GOOGL shares are slightly more expensive than the GOOG class.

Which shares of Alphabet to buy?

It all depends on whether you will want voting rights. Both types of shares move in tandem and react in the same way to news and events, so in the long run - your return will not be affected regardless of which type of shares you buy. If you intend to be an active shareholder and participate in the company's decisions, invest in Class A shares.

If you just want to "eat the wave" or you are not interested in expressing your opinion, then definitely invest in Class C shares.

Trader Martin Nikolov

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GOOG vs GOOGL? Which stocks to choose?

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