Alphabet Inc. 8-K

Summary

Alphabet completed a mandatory convertible preferred stock offering, issuing Series A depositary shares tied to Class A stock and Series B depositary shares tied to Class C stock. The shares pay 6.25% dividends and are scheduled to convert in 2029; capped calls are intended to reduce potential dilution, subject to a cap.

Key Figures

• Offering: 167.5M depositary shares of each series, plus 25M additional shares of each series after the underwriters exercised their over-allotment options in full, for 192.5M shares per series. Each depositary share represents a 1/20 interest in preferred stock with a $1,000 liquidation preference per preferred share.
• Dividends: 6.25% annually on each series’ liquidation preference, payable if declared on February 15, May 15, August 15 and November 15, beginning 8/15/2026 and ending 5/15/2029. Dividends may be paid in cash, shares or a combination. While either series remains outstanding, unpaid accumulated dividends generally restrict dividends on, and repurchases of, junior or parity stock.
• Conversion: Unless converted earlier, Series A depositary shares automatically convert on or about 5/15/2029 into 0.1126–0.1408 Class A shares each; Series B into 0.1137–0.1421 Class C shares each. Conversion rates depend on the applicable stock’s average volume-weighted average price over a 20-trading-day period beginning 21 scheduled trading days before 5/15/2029.
• Capped calls: Initial cap prices are $532.6704 per Class A share for Series A and $527.7974 per Class C share for Series B, subject to adjustment. Alphabet may elect cash settlement; the calls’ potential dilution reduction is capped. In a liquidation, each preferred share has a $1,000 preference plus accumulated unpaid dividends, ahead of junior stock.

Investor Takeaways

• Watch for the first dividend dates beginning 8/15/2026 and whether the board declares the scheduled dividends.
• The conversion rates and resulting share issuance will depend on the relevant 20-trading-day average before the scheduled 2029 conversion; capped-call protection is limited by the applicable cap.