Why Google's split will change the S&P 500 forever

http://www.cnbc.com/id/101535041
Posted Apr. 2, 2014

This articles discusses the ramifications of the Google stock split. Google effectively split their stocks on Wednesday. They are keeping the old Google shares and the new ones, making the S&P 500 have 501 components, even though it will only have 500 companies. The S&P 500 is a stock market index based on the capitalization of 500 large companies having common stock listed on NYSE or NASDAQ.
Google offered nonvoting shares with the voting shares that they had. This would then decrease the price of the shares because there were more and decreases the voting power of the shareholders. This prevents future disputes of power with investors who want the company to give more money. Class A shares can vote while Class C shares cannot, but both will be included in the S&P 500. This is something that has never happened before.

I think that this is groundbreaking for the future of the stock market. This is a good move on the part of Google so the company will not lose so much power as more and more people buy stock. There is a greater chance for growth and investment in their company. Our class is learning a bit about stocks through the Stock Market game and I am personally feeling the effects of the Google stock split. While I am losing a great deal of money during the split, I am hoping that I will be making money in the long run. Real investors will feel real effects from this decision. We, as a class can learn from the decisions of companies in the stock market how to respond. Real investors are also swayed in their decisions by the choice of companies like Google to make changes.

Works Cited

           "Google THIS!" Suzanne Evans. N.p., n.d. Web. 11 Apr. 2014.

Rosenburg, Alex. "Why Google's Split Will Change the S&P 500 Forever." CNBC.com. N.p., n.d. Web. 13 Apr. 2014.