Google is to split its stock for the first time, making its sky-high shares easier for the average person to buy.
The move comes as a response from investor concerns, and also acts as a way of preserving power for the company’s co-founders. The stock split was the first for Google since going public in 2004.
The two-for-one split, which the company announced along with an earnings report that beat Wall Street expectations, involves a complicated arrangement in which current investors will be issued new nonvoting shares, maintaining the company’s control in the hands of co-founders Larry Page and Sergey Brin.
Under the arrangement, anyone currently holding a share of Google’s Class A or Class B shares, will also receive a share of a new category of Class C shares. Unlike the other shares, the C variety will not carry any voting rights and will be traded on the Nasdaq exchange under a ticker symbol that is different from the current one, GOOG.
“We have a structure that prevents outside parties from taking over or unduly influencing our management decisions,” the co-founders said in a letter made public with their earnings report. “We have put our hearts into Google and hope to do so for many more years to come.”
The Mountain View search giant posted a profit of $2.89 billiona 61 percent jump from a year ago, on sales of $10.65 billion.
That amounted to earnings of $8.75 a share. Analysts surveyed by Thomson Reuters on average had predicted it would report just under $8.2 billion in sales and earnings of $8.31 a share.
Google made the announcements after the official end of trading, when its shares closed at $651.01, an increase of $15.05 or 2.4 percent. I
In recent months, some analysts also have expressed nervousness about Google’s wide array of ventures and its failure to provide specifics about some aspects of its business. Others have been concerned with its proposed $12.5 billion purchase of Motorola Mobility.
The Motorola transaction, which would give Google control of a prominent maker of smartphones, tablets and TV set-top boxes, in February won the blessing of U.S. and European regulators. But China is still reviewing the acquisition.