Alphabet Inc. 8-K

What Happened

• Alphabet announced on June 2–5, 2026 that it issued and closed two depositary‑share offerings: 167,500,000 Series A depositary shares (each representing 1/20th of a share of 6.25% Series A Mandatory Convertible Preferred Stock) and 167,500,000 Series B depositary shares (each representing 1/20th of a share of 6.25% Series B Mandatory Convertible Preferred Stock). Underwriters (Goldman Sachs, J.P. Morgan, and Morgan Stanley) exercised over‑allotment options on June 3, 2026 to purchase the additional shares. The offerings closed June 5, 2026.
• Alphabet filed Certificates of Designations (effective June 4, 2026) setting preferences and rights for each preferred series, and entered deposit agreements dated June 5, 2026 with Computershare acting as depositary. In connection with pricing, Alphabet also entered into capped call transactions on June 2 and June 3, 2026 to reduce potential dilution on conversion of the preferreds.

Key Details

• Coupon and size: each preferred series carries a 6.25% annual dividend and liquidation preference of $1,000 per preferred share; issuance was effected through 167,500,000 depositary shares per series (each depositary share = 1/20th of a preferred share). Over‑allotment options of 25,000,000 depositary shares per series were exercised in full.
• Conversion and timing: unless earlier converted, mandatory conversion settlement for both series will occur on or about May 15, 2029. Series A preferred converts into Class A common stock at between 2.2520 and 2.8160 shares per preferred (i.e., 0.1126–0.1408 per depositary share). Series B preferred converts into Class C capital stock at between 2.2740 and 2.8420 shares per preferred (i.e., 0.1137–0.1421 per depositary share). Conversion amounts are subject to anti‑dilution adjustments and are determined by a VWAP calculation prior to conversion.
• Dividends and payment: dividends accrue at 6.25% on the $1,000 liquidation preference, payable when declared (quarterly: Feb 15, May 15, Aug 15, Nov 15), beginning Aug 15, 2026 and ending May 15, 2029; dividends may be paid in cash, shares (subject to limits), or a combination.
• Capped calls: Alphabet entered capped call transactions tied to each series to reduce potential conversion dilution (subject to a cap). Initial cap prices are $532.6704 for Series A (Class A) and $527.7974 for Series B (Class C), subject to adjustment.

Why It Matters

• Dilution and share count: these are mandatory convertible preferred securities that will convert into Class A (Series A) and Class C (Series B) shares in 2029, increasing share counts for the applicable classes within the specified conversion ranges; the capped calls are intended to limit dilution but will not change holders’ rights in the depositary shares.
• Priority and capital treatment: the preferreds have dividend and liquidation priority over common stock. While dividends are payable only when declared, the Certificates of Designations bar most dividends, redemptions or repurchases of common stock while any preferred of a series remains outstanding unless accrued preferred dividends are satisfied—this can affect capital returns to common shareholders until conditions are met.
• Investor takeaway: retail investors should note the timing (mandatory conversion in 2029), the potential for dilution to Class A or Class C shares depending on conversion outcomes, the 6.25% accrued dividend priority, and the existence of capped‑call hedges that partially limit dilution.