Google stock(s) are up over 4% as the company decided to make its corporate structure..... ABC, easy as 123 , simple as do re mi.....
Let's see if these simple gains hold during tomorrows session. $GOOGL is approaching its previous record highs after the bell.
From the WSJ:
Google Inc. is once again doing something that seems crazy and unpredictable as a way for its founders to retain control of the company, but with an eye on a different future.
The Internet search and advertising giant is creating a new corporate structure (http://www.marketwatch.com/story/google-announces-new-structure-with-alphabet-as-parent-firm-2015-08-10)that will put all its various businesses under a larger holding company, to be called Alphabet Inc. With Alphabet as a main umbrella company, its other businesses will operate autonomously with their own CEOs, but accountable to Google co-founder and Alphabet Chief Executive Larry Page.
Page's fellow founder, Sergey Brin, becomes president of Alphabet, which will trade under the Google (GOOGL) stock symbol. Sundar Pichai, 43, senior vice president of products, becomes the CEO of Google, the core search and advertising business that will now be a subsidiary of Alphabet. Pichai most recently was senior vice president of Android, Chrome and Apps.
With many older companies in Silicon Valley recently looking at spinning out or separating better performing businesses, this set-up could mean that Google -- or Alphabet, as investors may be forced to refer to the umbrella company -- will look to spin off fast-growing businesses such as YouTube. (https://investor.google.com/releases/2015/0810.html) (https://investor.google.com/releases/2015/0810.html) (https://investor.google.com/releases/2015/0810.html)
Page noted in an investor letter (https://investor.google.com/releases/2015/0810.html)that the move will help the company "keep tremendous focus on the extraordinary opportunities we have inside of Google."
Within the company, the new structure is likely to set off an internal competitive frenzy, as top executives vie against each other to be chosen to run their businesses. In addition, the structure may provide more transparency of the company's long-term "moonshot" research projects. Google said its separate businesses, such as Calico, Nest, and Fiber, as well as its investing arms, Google Ventures and Google Capital, and incubator projects, such as Google X, will be managed separately from the Google business.
"Alphabet is about businesses prospering through strong leaders and independence," Page said in his letter. "In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We'll also make sure we have a great CEO for each business, and we'll determine their compensation."
Of course, the strongest CEO will be Page, with Brin and executive chairman Eric Schmidt at his side. The new Alphabet structure will keep the same ownership set-up that Google Inc. uses today, with Page and Brin keeping control thanks to a combined 54.9% of the voting power and Schmidt holding 5.5%, according to the proxy filing for the company's June annual meeting.
The company said in Monday's Securities and Exchange Commission filing (http://www.sec.gov/Archives/edgar/data/1288776/000128877615000039/a20150810form8-k.htm) that each share of each class of Google stock issued prior to the Alphabet deal will automatically convert into an equivalent corresponding share of Alphabet stock, with the same rights, powers and designations of the previous Google shares.