Rather than pay a cash dividend, which is culturally repugnant to so-called growth stocks, Google said late Thursday, after posting better-than-expected results, that it would repay its stockholders, who must be dizzy from all its up and down movement, by giving them more non-voting stock, effectively a two-for-one tax-free stock split.
It will create a “new class C stock” that trades under a different ticker symbol.
In a letter on the Google web site Google founders Larry Page and Sergey Brin restated their control over the massive company because they, along with chairman Eric Schmidt, own the only real voting stock, which won’t be part of the split. They also hold a lot of the non-voting Class A stock and even as Class B holders will get the new class C stock.
Page said in passing that Google isn’t planning any big acquisition soon. Google has its eye on Apple’s recent unthinkable move to institute a cash dividend because of its gargantuan cash hoard.
Google chief counsel David Drummond said a special board committee of independent directors with its own advisors took 15 months to come to the new stock conclusion.
There’s no indication when the split could happen.
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