Skip to content

October 2, 2015

Google will officially become a subsidiary of Alphabet today

by John_A

alphabet

When the market closes today, Google as we know it, in a small way, will be no more. Our long-time internet guide and companion will become a subsidiary of Alphabet, which is a holding company made up of Google’s founders, chairman, CFO and legal boss.

The shift has been a long time coming. The idea is to structure Google in such a way that its reliably profitable ventures will be separate from its more risky, exploratory investments and projects.

If everything goes well, Google’s stock shares will be translated into the very same amount of Alphabet shares. Stock tickers for shares of Class A ($GOOGL) and Class C ($GOOG) should stay the same, as will shareholder rights and the board. There is some degree of contention regarding Class B shares, as these are held by only the very top executives.

This stock market realignment shouldn’t affect the everyday operations of any of the involved companies. However, it is a slick move of financial engineering that will afford Alphabet more flexibility to justify its spending to its investors, and it will also give the company a greater ability to buy up other companies.

Assuming all goes as planned, the maneuver may give individual companies within Alphabet’s corporate environment greater freedom to innovate and give employees more liberty to pursue entrepreneurial endeavors.

Alphabet doesn’t intend to share the individual financials of its subsidiaries, which are broken out of the original Google Inc, until it releases its fourth quarter earnings in January. For now, nine subsidiaries exist publicly including Google Capital and Google ventures.

Read more from News

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Note: HTML is allowed. Your email address will never be published.

Subscribe to comments

%d bloggers like this: