Legg Mason Takes a Large Google Stake

Value shop Legg Mason (LM Quote) said Tuesday it owns almost 13% of Google's (GOOG Quote) Class A stock.

The Baltimore asset manager said in a Securities and Exchange Commission filing that it holds 4.3 million Class A shares in the Mountain View, Calif., Internet search engine. At Tuesday's prices, Legg Mason's Google stake is valued at $580 million.

The holdings make Legg Mason Google's second-largest fund investor, though the firm owns just a tiny stake in the company overall. Based on total shares outstanding, Legg Mason owns less than 2% of Google.

The largest slice of Legg Mason's Google stake is held by its (LMVTX Quote)Value Trust fund. That fund, led by value manager Bill Miller, owns 2 million shares, amounting to a 6% stake in Google's Class A stock.

The Legg Mason Value Trust has long been closely watched by value-seekers in the stock market, in part because of Miller's 13 consecutive years outperforming the S&P 500.

Tuesday's filings indicate Legg Mason has bought Google shares aggressively since the company's Aug. 19 IPO. In that offering, Google and selling shareholders parted with 22.5 million Class A shares, including overallotments.

Legg Mason isn't the only big fund buying Google stock, obviously. Last month Boston-based fund giant Fidelity disclosed that it held 5.2 million shares of the search engine's Class A common stock as of Aug. 31.

Assuming that Legg Mason and Fidelity are each still holding on to the shares declared in their filings, the two investment firms hold at least 35% of Google's freely tradeable shares.

Though the Class A share counts at some fund shops are raising eyebrows, Google insiders remain firmly in control of the company. Google has a total of 271 million shares outstanding, 238 million of which are supervoting Class B shares held mostly by company insiders, including co-founders Sergey Brin and Larry Page.

Given that Class B shares have 10 votes apiece, compared to one vote for each Class A share, the voting power of any outsider's stake is minuscule.