The primary difference between Alphabet Class A and Class C shares lies in their voting rights and, consequently, their market valuation and investor appeal.
- Voting Rights:
- Class A shares (GOOGL) have voting rights, making them more suitable for investors seeking influence or representation in the company's decision-making processes12.
- Class C shares (GOOG) do not have voting rights, which makes them more suitable for passive investors or those primarily interested in the company's earnings and growth12.
- Market Valuation and Price:
- Class A shares tend to trade at a slight premium compared to Class C shares due to their voting rights. This premium is typically small, often less than $1, which is a negligible fraction of the stock price2.
- The price difference between the two classes is so small that it often goes unnoticed, and in some cases, Class GOOG shares have even temporarily traded at a higher price than Class GOOGL shares3.
- Investor Preferences:
- Investors who value voting rights and want to have a say in the company's direction may prefer Class A shares (GOOGL)12.
- Those who prioritize the company's earnings and growth over voting rights may opt for Class C shares (GOOG)12.
- Company Structure and Control:
- Alphabet's dual-class structure was created to allow founders Larry Page and Sergey Brin, and former CEO Eric Schmidt, to maintain control of the company even as it grows and new shares are issued45.
- Class B shares, which have ten times the voting power of Class A shares, are held by the founders and are not publicly traded2.
In summary, the key difference between Alphabet Class A and Class C shares is the presence of voting rights in Class A shares, which gives investors a voice in the company's governance. Class C shares, on the other hand, are more focused on providing investors with an ownership stake in the company without the burden of voting responsibilities.