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Why Do Zillow, Alphabet, and Under Armour Have Two Different Stock Symbols?

By Matthew Frankel, CFP® - Jun 30, 2021 at 7:06AM

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Here's what investors need to know about multiple share classes.

There are several stocks in the market that have more than one stock symbol, including Zillow (Z -6.25%) (ZG -6.05%), Alphabet (GOOG -1.79%) (GOOGL -1.77%), and Under Armour (UA -2.49%) (UAA -2.83%). These represent dual-class share structures, and in this Fool Live video clip recorded on June 16, contributor Matt Frankel, CFP, discusses what this means and why it's important to investors. 

Matt Frankel: Can you explain the difference between Zillow Z, Class C shares, and ZG, ticker symbol, Class A shares?" I'm going to answer this from a broader perspective. You'll see a lot of stocks that have two different share classes that are publicly traded. Alphabet or Google is one. GOOG and GOOGL. You'll see Under Armour's one, UA and UAA. There are quite a few that have this dual class structure. Usually, the difference is voting rights. One share class will trade for a slightly higher amount. I'm not sure which one it is with the Zillow off top of my head. I think that the ZG is the one that has voting rights and Z does not, but don't quote me on that. But one has voting rights, one doesn't. The one with voting rights will always trade for a slight premium. If you care about being able to vote on your company's annual meetings, then buy the one with voting rights. If not, both share classes represents the exact same economic interest in the company. If they declare a dividend on one, we usually declare a dividend on another. If the company announces $0.30 in earnings per share, that will apply to both of their share classes. The only exceptions are where a company has share classes that represent a completely different size of ownership like Berkshire Hathaway (BRK.A -0.87%) (BRK.B -0.78%). Berkshire Hathaway A shares and B shares if you check their prices, do not represent anything close to the same amount of ownership in the company. For the most part, when you see two classes of shares listed on an exchange, it's because one has voting rights in company matters, like electing the board of directors and approving things like director compensation, things like that. One does not have the right to vote on those type of matters. Hopefully that helped with that question. 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Matthew Frankel, CFP owns shares of Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Berkshire Hathaway (B shares), Under Armour (A Shares), Under Armour (C Shares), Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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Stocks Mentioned

Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$36.04 (-6.05%) $-2.32
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$457,277.49 (-0.87%) $-4,022.50
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$304.26 (-0.78%) $-2.39
Alphabet Inc. Stock Quote
Alphabet Inc.
$119.55 (-1.77%) $-2.15
Under Armour, Inc. Stock Quote
Under Armour, Inc.
$9.95 (-2.83%) $0.29
Alphabet Inc. Stock Quote
Alphabet Inc.
$120.32 (-1.79%) $-2.19
Zillow Group, Inc. Stock Quote
Zillow Group, Inc.
$35.86 (-6.25%) $-2.39
Under Armour, Inc. Stock Quote
Under Armour, Inc.
$9.01 (-2.49%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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