You might have heard the term “Alphabet Shares” in the world of trading and I know how confusing it is. But with the help of this article, I will try my best to simplify what are Alphabet Shares, Alphabet inc. , GOOG and GOOGL. And, then I will explain to you how to buy Alphabet shares in the UK and which is the right place to do so. Stick with me until the very end of the article to know where to go to buy Alphabet Shares and which share class will make you more profit. So, without further ado let’s jump straight into our topic.
What are Alphabet Shares?
As the name suggests, alphabet shares are the shares that are denoted by a specific alphabet, like A shares, B shares, C shares and so on. Simply put, when more than one class of shares exists, companies start designated them as Class A, B or C and so on. A company shares alphabet shares when its shareholders approve it and all the rights associated with it are determined through a company’s article of association. And, if companies do not identify which rights are attached to which share class then each share ranks equally. Alphabet shares are ideal for family businesses or for joint ventures. With alphabet shares, you can assign different rights and dividends to different shareholders.
Alphabet is a parent company of Google and of its many subsidiary companies, which doesn’t even require any introduction. Google is the most popular search engine that we have today.
Alphabet incorporation is the result of the reconstruction of Google that happened because Google wanted to make its business cleaner and more accountable while allowing other companies to operate in businesses other than internet service.
Advantages of investing in Alphabet Shares
Following are the major advantages of Alphabet Shares:
Unlike other shares where company owners are obligated to pay an equal dividend to all the shareholders, Alphabet Shares allow company owners to pay dividends to shareholders according to the class of the shares they hold. That means dividends in Alphabet Shares are more flexible.
With Alphabet Shares, a company is allowed to offer diversified rights to shareholders. That means shareholders can vary in terms of the work they have assigned by the company such as voting rights, dividends, and ensure tax efficiency.
Well, Alphabet Shares alone cannot help you in reducing tax but they can help you to some extent by distributing income among spouses to utilise nil and basic rate tax bands.
Accommodate family members
As we have discussed above, Alphabet shares are mostly ideal for family businesses as it allows them to accommodate different families without offering them administrative powers.
Who can Invest in Alphabet Shares?
Anyone can invest in Alphabet Shares whether you are planning on long term investment or day trading activity. Alphabet share skyrocketed and reached its all-time high of $1717.39 during the covid pandemic on September 02, 2020. Since then, it has been following an upward trend. Alphabet now has marked its place in the list of Top American Companies that have hit a market cap of $1 trillion. Alphabet became the parent company of Google in 2015 but it still allows you to trade Google shares, under the name GOOG and GOOGL. Because the founder of the Company Larry Page and Sergey Brin wanted to retain the primary control of the company Google decided to create two classes of shares, class A and class C and the ticker symbol for Class A is GOOGL and for Class B is GOOG.
What is the difference between GOOGL and GOOG?
The key difference between GOOGL and GOOG is that GOOGL shares are categorised as Class A shares and offer investors ownership stake and voting rights. These are also known as the most common types of shares. While on the other GOOG Shares are categorised as class C shares that do not offer voting rights to their shareholders. However, shareholders do get ownership just like GOOGL shareholders.
Note: Class C shares offered by Mutual Funds are not GOOG Shares.
One more thing to note down here is that Alphabet has never paid a dividend and if it ever decides to pay it in the future then both the GOOGL and GOOG shareholders will receive an equal amount since both the share classes are entitled to an equal amount of the company’s earnings.
Which to buy GOOG or GOOGL?
As we have discussed, the key difference between both the shares is the voting rights and both the shares are entitled to an equal amount of the company’s earnings and will receive the same amount of dividends. That means, it doesn’t matter which share you buy, you will end up making the same profits. But, if voting matters to you then you should buy shares of GOOGL.
Well, we have talked enough about GOOGL (Class A) and GOOG (Class B). Now let’s learn about Class B.
Class B Shares– Special Shares
Class B shares are not traded publicly and have an outstanding of around 46.5 million. Founded in April 2014, these shares are considered ‘special’ shares. Each shareholder who owns class B shares is provided with ten votes. That means Class B shares have ten times the power of voting of Class A shares. Class B shares were created because the founders wouldn’t want to lose control over the company even in the worst scenario of owning up to less than fifty per cent of the company’s stock.
Major subsidiaries of Alphabet Inc.
Google – The Most Dominating Ad Service
When investing in something you would think of an asset that can at least stay in the middle in times of economic recession. And, there will never be an asset better than search ad services as offered by Google that has the potential of staying resilient even in tough times. Presently, Google searches ad services control over 90 per cent of the global market share and 87 per cent of the US market. It has been reported that with an annual income of $160.74 billion Google in 2019 was alone responsible for the majority of Alphabet’s revenue out of which $134.81 billion of its revenue comes from its ad service, which is insanely huge.
Along with Google, Alphabet also owns Waymo. It is an American automated driving company that ranks behind Tesla in the automated driving race. Investing in Waymo can be very beneficial because if it succeeds in the coming future then that would automatically result in increasing the share price of Alphabet. That means if you are considering investing in Alphabet Shares, Waymo is what you should consider investing for income.
Keep it or Sell it?
From what we have understood of Alphabet shares, we would recommend you to keep a hold of your shares as long as you can because of the simple reason that it has huge growth potential and is considered as High Yield Investment .Google’s 5 years average ROCE and its free cash flow are quite impressive as they stand at 14.9% and 17.4 % respectively. Alphabet Shares advantages like diversified rights and dividends also add to its credibility. And, the one and the only reason to sell Alphabet shares is the price correction which tends to happen at some point in the future. However, the final decision remains in your hands only.
If in case you decide to sell Alphabet Shares, then the method for it is Short Selling. In short-Selling investors do a betting against a stock by simply borrowing the shares from the broker and then selling those shares to some other investors in the hope of purchasing those shares again at a lower price. However, as per some rules set by the government short-Selling is restricted at some firms in the UK. That leaves you with the most preferred method that is through CFDs for which you need to find an authorized CFD broker such as Libertex, eToro and Plus500.
Best Trading Platforms that allow Alphabet Trading
Today there are hundreds of trading platforms that are available in the platform and many of those platforms allow you to trade Alphabet shares. However, finding one can be very difficult and time-consuming because you cannot trust all the Platforms just because they offer the financial asset class you are looking for. There are many fake Platforms that dupe away your money and you cannot even raise a dispute against them. There is a lot more than a trading asset class to look into a trading platform. There are many metrics that you should consider before heading straight to a platform such as ensuring whether the platform is regulated or not, its fee structure, availability of a demo account and many more. Therefore to save your time and energy we have listed down the best brokerage Platforms that offer you Alphabet Shares along with other securities.
eToro- world’s finest trading platform
eToro never misses any chance to impress its traders, and that’s why it is considered the world’s most preferred trading platform. This number one platform is attracting many traders globally because it has everything for everyone, it takes care of every trader’s choices. This platform allows you to trade a variety of financial assets, including, cryptocurrencies, forex, indices, commodities and shares without charging any commission. When talking about shares it offers a variety of options, including Alphabet shares in the Most cost-effective method. The platform is further regulated by the FCA, ASIC and CySEC. Even the platform is accessible to US traders as it is also registered with FINRA. Except you will be required to pay a 0.5% fee on all your deposits and $5 on every withdrawal. It is the cheapest brokerage platform in the UK.
For beginners, eToro provides the copy trading feature. This feature allows you to copy ongoing trades of expert traders. You can also use the copy portfolio feature, which allows you to diversify your investment portfolio. Unlike other platforms, account creation on this platform is not time-consuming. It takes only a few minutes to create an account on eToro. Once you are done with creating an account you are then required to fund it to start your trading journey. For the convenience of its user’s, it accepts various payment methods for making a deposit such as Debit/Credit Card, Bank account, e-wallet e.t.c. The fee attached to the platform is an inactivity fee of $5, which is understandable and also the spreads are relatively low. The platform also offers a mobile application for the convenience of its customers. This trading platform also offers 24/7 available customer support which other free platforms don’t offer.
- Regulated by FCA, ASIC and CySEC
- Copy-trading and CopyPortfolio feature
- Offers a variety of financial assets
- Accepts debit/credit, bank account, e-wallet
- Fractional trading
- Not suitable for advanced learners
Plus 500- Trade through CFDs
Another brokerage platform that we have on our list is plus 500 that gives access to a variety of different financial assets through CFDs including Alphabet shares with a spread of 1.25 or 0.07 % and 0.5 minimum deposit. Moreover, it allows you to apply the leverage of up to 5:1 on Alphabet shares. The platform is fully packed with advanced charting packages, an economic calendar, risk management tool and price alerts service.
The platform is regulated by the FCA. Hence it makes sure that all of its traders’ funds are not compromised at all. Its parent company is listed on the London Stock Exchange. The account creation on this platform is not time-consuming. All you are required to do is to enter your few basic details, undergo a verification process, make a deposit and that’s all. To deposit on this platform you can either use debit/credit cards, bank transfers or PayPal.
- Regulated by the FCA
- Access to a wide range of investment assets
- Leverage of up to 5:1 for retail customers
- Easy and fast account creation
- Offers short selling
- Price alert feature
- Offers mobile application
- CFDs only
- Not beginners-friendly
Libertex- free CFD trading platform
Another best trading platform that allows you to invest in Alphabet Shares is Libertex. This amazing platform allows traders to trade via CFD. It offers a variety of trading financial assets to diversify your portfolio including, Commodities, Alphabet Shares, Cryptocurrencies and Forex. The platform allows you to enter and exit the market without paying a spread. However, you will be required to pay a minimal amount as a commission which in any case will be less than 0.1%, though many of the financial markets can be traded commission-free with Libertex. The platform also provides MT4 and MT5 and also a mobile application for the convenience of its traders. Moreover, the platform is completely safe to use as it is regulated by CySEC and FSA and also has a reputed history of more than 20 years. Libertex for the convenience of its traders also offers a free demo account feature that allows you to practice trading without investing in your real money.
- Regulated trading platform
- Minimal commissions
- A well-reputed history record
- Compatible with MT4 and MT5
- Offers a variety of financial investment assets
- Offers zero spread CFD trading
- Offers Alphabet Shares
- Only CFDs are available.
- Offers around 50 shares only
How to Buy Alphabet Shares
You can buy shares either by share dealing or by trading derivatives. If you choose to buy Alphabet Shares by share dealing then that means you are investing in shares and getting direct ownership of the shares. So, if the price of the shares goes up, you will make a profit and if the price of the share goes down naturally you will make a loss.
If you choose the future trading that is trading derivatives such as through CFDs or Spread betting then it means you get to speculate on the price movements of Alphabet Shares without getting any direct ownership of the shares you have invested in. However, with this, you get an advantage of applying leverage.
Following is a step by step guide so that you get a crystal clear understanding of how to buy Alphabet shares through the trading platform.
Here we are taking eToro as an example because of the simple reason that this platform is our favourite as it has everything that a trader looks for in a trading platform.
Step1: Open an account
The very first step to buy Alphabet shares is to create an account on the official website of eToro. To do so you are required to fill in a registration form by entering in your basic details such as your name, phone number, e-mail address, and setting a strong password. After entering all of your details make sure to accept terms and conditions.
eToro will ask you to verify your identity by uploading some of your documents, don’t worry as your documents are truly safe on this platform. However, you don’t need to undergo verification until you deposit more than $2,250 or you request a withdrawal.
Step 2: Fund your account
Now that you have successfully registered on this platform you are now all set to fund your account by making a minimum deposit of £150. This funding amount isn’t the fee of the robot but the working capital that is needed by the traders to execute trades. eToro offers several payment methods for the convenience of its traders, you can choose whatever method you feel more comfortable with. The payment methods supported by eToro are Debit/Credit Card, PayPal, Skrill, Nettler, and Bank Transfer.
Step 3: Buy Alphabet Shares
Now that you have successfully funded your account, you are then required to select your desired Alphabet Shares by simply entering Alphabet or GOOG or GOOGL in the search box. Once entered, the Alphabet Share page will appear and then you are required to place a buy order by clicking the Trade button on an order form. To buy shares immediately at the best available price in the market you will need to set up a market order in the order form. And, then you need to enter the amount you wish to invest in and then click on the open Trade to complete your purchase.
Alphabet Shares are good for long term investment since it has huge potential growth. It is an investment for retirement. However, even day traders can also opt for Alphabet Shares.
If you are willing to invest in Alphabet Shares then now is the right time to do so. Alphabet is a parent company of Google, it is worth more than Google as it operates a line of businesses including, YouTube, Nest, Waze, Double click and many more. We recommend you to start trading Alphabet shares through our most favourite trading platform, eToro.
- What are Alphabet Shares?
Alphabet shares are the shares that are denoted by a specific alphabet, like A shares, B shares, C shares and so on.
- Are Alphabet shares and Google Shares the same?
Yes, Alphabet is the parent company of Google. And, its shares are categorised into two categories, Class A and Class B shares under the ticker symbol GOOGL and GOOG respectively. These two categories were created because the founder of the Company Larry Page and Sergey Brin wanted to retain the primary control of the company, Google.
- What are GOOG shares?
Class C shares are called GOOG shares. If you own these shares you get indirect ownership of the company but you are not allowed to vote in the shareholder’s meetings. These shares are cheaper than Class A shares.
- What are GOOGL Shares?
Class A shares are called GOOGL shares. These shares give indirect ownership as well as voting rights to their shareholders. That means Class A shareholders can vote in the shareholder’s meeting held by the company.
- Which class of share is more expensive?
GOOGL shares are more expensive than GOOG shares because these shares offer you voting rights. However, the price difference is minimal, around 0.1%.
- Is voting a big deal?
Well, it may feel good to be allowed to vote in the company meetings but it not really is a big deal because all the power is in the hands of the founders and directors of the company. So, casting a vote in the shareholder’s meetings is not a big deal and sometimes voting is just in the name only.