When a split isn't a split.

Google just conducted what some are calling a 2:1 stock split, but this really isn't a true stock split.  What GOOG has done is created a new class of voting stock and issued one share of these to every stock holder.  In effect doubling the number of shares outstanding.  But the new non-voting shares are obviously inferior to the original shares.

There are plenty of reasons offered for why firms split their stock - the most common is that there is some sort of desirable trading range that investors want.  Firms split to keep their stock prices in this trading range.

But in Google's case I don't think that this is the reason.  The reality is that Google's management is seeking to reduce the opportunity for outsiders to gain a controlling stake in the company.  In effect Larry and Sergey are taking steps to increase their entrenchment.   Their rationale is simple - we know what's best for Google in the long run and those of you who've invested in our company can go and ...(well you get the idea).

Here are a couple of great blog postings on this.  First Felix, and then Kid Dynamite.

Google's motto is do no evil.   Yeah right.