Alphabet Stock


DEFINITION of 'Alphabet Stock'

An equity share that is tied to a specific subsidiary of a corporation. It called an alphabet stock because the classification system uses letters to distinguish the stock from the parent company's stock. Alphabet stock has different voting rights from the parent company's stock. Moreover, alphabet stock typically pays a dividend that is tied to the operating performance of the particular subsidiary rather than the parent company.

BREAKING DOWN 'Alphabet Stock'

Also referred to as a special class stock. An example of an alphabet stock would be Berkshire Hathaway's class A and class B shares. Alphabet stocks typically result from acquisitions or restructuring, but a company may issue them for other reasons.

  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Tracking Stock

    1. Common stock issued by a parent company that tracks the performance ...
  3. Sum-Of-Parts Valuation

    Valuing a company by determining what its divisions would be ...
  4. Merger

    The combining of two or more companies, generally by offering ...
  5. Parent Company

    A company that controls other companies by owning an influential ...
  6. Carve-Out

    The partial divestiture of a business unit. A company undertaking ...
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