The Internet search engine god finally began trading Wednesday and promptly soared above its greatly reduced $85 offering price. Thursday the stock (GOOG on Nasdaq) was up even more.
Many Google-heads are in search engine heaven, knowing they own a piece of this Internet marvel. What they may not realize is that while they and a bunch of their friends may own stock, they wont have any say in major company decisions or have a vote on the board of directors.
Largely overlooked in the hubbub around the IPO was the notice that Google management intended to retain Class B shares of stock while regular investors got Class A shares.
Class B shares have ten votes for every one vote of Class A shares of stock. The bottom line, as accountants like to say, is that the management of Google retains control of the board of directors, and the company.
They can elect anyone they want to the board and make any decision they want because they will have enough votes to trump any shareholder objection.
There is nothing illegal about this, however, investors will want to watch carefully how Google manages public and shareholder relations. Given the missteps prior to going public, it will be interesting to see if the company can make the transition from private to public company.