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I recently found out that the difference between GOOG and GOOGL shares is that GOOG shares do not have voting rights. Then I read that the leadership is not planning to pay dividends anytime soon (rather they prefer to reinvest).

Why do GOOG shares have value? Is it an irrational market? More remarkably, GOOG share price is typically within <1% of GOOGL share price, how come!?

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    $\begingroup$ Because Google/Alphabet is essentially controlled by its founders and early investors (e.g. through non-traded Class B shares) the voting rights in GOOGL Class A shares are not particularly valuable when compared to non-voting GOOG Class C shares. $\endgroup$
    – Henry
    Mar 18 at 8:44
  • $\begingroup$ Why should voting rights command a premium in the market? Do you think your vote would lead to better decisions at Google in terms of future dividends and share price increases? $\endgroup$ Mar 18 at 14:55
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    $\begingroup$ @Alex How can one have an ownership stake without having voting rights? I see them as coming hand in hand. $\endgroup$ Mar 18 at 22:38
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    $\begingroup$ Could you give me an example of what you would like to do with your voting rights at Google that will make the company better? Or if you ever owned some shares at some company with voting rights, what you did with your voting rights to improve that company. Also, how should a voting right help you at a company that never generates profits. That's economically completely useless. $\endgroup$
    – Alex
    Mar 18 at 23:37
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    $\begingroup$ @NicSzerman Whenever owners voting shares receive any money, so do owners of non-voting shares. Thus, the voting rights can't be used to just give all the money to the people with voting rights. $\endgroup$
    – user253751
    Mar 21 at 12:38

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The share value comes from expected discounted cash flows – either from dividends or from share price increases. These can be used for financing consumption from which people derive utility. See Cochrane's "Asset Pricing" suite, start from chapter 2 of the textbook.

If you think that the current management of Google is incompetent and you could do better in terms of the cash flows that Google generates for its shareholders, then a voting right would give you a chance to do that. You would thus be able to increase the value of the company and the price of its shares. However, I think a presumption of you being able to do better than the current management is not very realistic.

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    $\begingroup$ @NicSzerman, I have merely reproduced a basic claim from standard asset pricing theory. Did I get it wrong? What is it that you find lacking? I also suggest that critical ad hominem remarks are not helpful. $\endgroup$ Mar 19 at 17:52

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