NEW YORK (TheStreet) -- Google (GOOG) is splitting its stock so that it can issue Class C shares, which won't have any voting rights, as opposed to Class A shares, which carry one vote per share, and Class B shares, which get 10 votes per share.
Google has issued Class A shares to pay employees and finance acquisitions. That was diluting the Class B voting rights, which meant the voting rights of Larry Page and Sergey Brin, the company's founders, who have a combined 56% of the voting rights, a percentage that was shrinking fast because of the heavy issuing of new Class A shares.
With the stock split, due to take effect on Wednesday, Google can issue Class C shares without worrying about Class B share voting power dilution. The current shares will be split into one share of its original kind (Class A or Class B) and one Class C share so that each shareholder will have the same number of votes as he did before the split.
The S&P 500 intends to keep both the old and new Google shares in its index, causing the S&P 500 to have 501 components. That has never happened before.
In February, the S&P 500 was considering having Google trade its Class A and Class B shares under the new ticker GOOGL, while using GOOG for the Class C shares and keeping only the GOOG shares in the index. The S&P 500 ended up keeping them all under GOOG and keeping them all in the index.
With Google's lower stock price, I will be excited to jump in and maybe do a little Google trading. Even though $600 is still a high price for a day-trading stock, Google's trader sentiment is always clear and the stock is volatile, which makes me tempted to trade it.