S&P Issues Statement on Treatment of Google (GOOG) Stock Split
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S&P Indices issued a statement on the treatment of Google's (NASDAQ: GOOG) stock split in the S&P 100 and S&P 500:
Statement:
Google Inc. is establishing a new class of capital stock and is paying a dividend of one share of this new class of capital stock for each outstanding share of Class A and Class B common stock. This new capital stock, which will be known as Class C capital stock, will be available for use for, among other things, stock-based acquisitions and equity- based employee compensation. Holders of shares of Class C capital stock will have no voting rights. S&P Dow Jones Indices anticipates that over time, the Class C shares will become the primary equity trading line for Google. For index purposes, S&P Dow Jones Indices will add the Class C share line to the S&P 100 and S&P 500 indices effective after the close of trading on Wednesday, April 2, the distribution date, in order to replicate the Class C shares being distributed to Class A shareholders. The Class C share line and the Class A share line will both represent Google in the S&P 100 and S&P 500 until the close of trading on Friday, June 20, effectively raising the number of constituents in those indices to 101 and 501 respectively during that timeframe. Effective after the close on June 20, the Class A share line will be dropped from the indices and the Class C share line will become the sole trading line for Google in those indices.
Per the S&P U.S. Indices Methodology, companies that have more than one class of common stock outstanding are represented only once in an index. The stock price is based on one class, usually the most liquid class, and the share count is based on the total shares outstanding. An investable weight factor is applied to ensure that only the publicly available share float is included in the index.
S&P Dow Jones Indices’ US Index Committee reviewed Google’s stock split with major index fund managers, index traders and other market participants. Based on this review, the US Index Committee chose to temporarily include both share classes in the S&P 100 and S&P 500 to reduce the risk of possible market volatility related to distribution of the Class C shares and the resulting index adjustment.
Following is a calendar of events:
April 2, 2014: Payable date for Google Class C shares distribution. Class C shares added to S&P 100 & 500 (post market close)
April 3, 2014: Dividend ex-distribution date
April 3 -June 20, 2014: Class A share line & Class C share line included in S&P 100 & 500 S&P 100 & S&P 500 trade with 101 & 501 trading lines respectively.
June 20, 2014: Class A share line is deleted from S&P 100 & 500 (post market close).
June 23, 2014: S&P 100 & S&P 500 trade with 100 & 500 trading lines respectively.
Statement:
Google Inc. is establishing a new class of capital stock and is paying a dividend of one share of this new class of capital stock for each outstanding share of Class A and Class B common stock. This new capital stock, which will be known as Class C capital stock, will be available for use for, among other things, stock-based acquisitions and equity- based employee compensation. Holders of shares of Class C capital stock will have no voting rights. S&P Dow Jones Indices anticipates that over time, the Class C shares will become the primary equity trading line for Google. For index purposes, S&P Dow Jones Indices will add the Class C share line to the S&P 100 and S&P 500 indices effective after the close of trading on Wednesday, April 2, the distribution date, in order to replicate the Class C shares being distributed to Class A shareholders. The Class C share line and the Class A share line will both represent Google in the S&P 100 and S&P 500 until the close of trading on Friday, June 20, effectively raising the number of constituents in those indices to 101 and 501 respectively during that timeframe. Effective after the close on June 20, the Class A share line will be dropped from the indices and the Class C share line will become the sole trading line for Google in those indices.
Per the S&P U.S. Indices Methodology, companies that have more than one class of common stock outstanding are represented only once in an index. The stock price is based on one class, usually the most liquid class, and the share count is based on the total shares outstanding. An investable weight factor is applied to ensure that only the publicly available share float is included in the index.
S&P Dow Jones Indices’ US Index Committee reviewed Google’s stock split with major index fund managers, index traders and other market participants. Based on this review, the US Index Committee chose to temporarily include both share classes in the S&P 100 and S&P 500 to reduce the risk of possible market volatility related to distribution of the Class C shares and the resulting index adjustment.
Following is a calendar of events:
April 2, 2014: Payable date for Google Class C shares distribution. Class C shares added to S&P 100 & 500 (post market close)
April 3, 2014: Dividend ex-distribution date
April 3 -June 20, 2014: Class A share line & Class C share line included in S&P 100 & 500 S&P 100 & S&P 500 trade with 101 & 501 trading lines respectively.
June 20, 2014: Class A share line is deleted from S&P 100 & 500 (post market close).
June 23, 2014: S&P 100 & S&P 500 trade with 100 & 500 trading lines respectively.
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