©2015 Bloomberg News
NSW4JXSYF01S

(Bloomberg) — Building on a change it began last year with Google Inc.’s stock split, S&P Dow Jones Indices will add additional share classes for Twenty-First Century Fox Inc., News Corp. and Comcast Corp. to the Standard & Poor’s 500 Index.
The action will bring the number of individual stocks in the index to 505, although the number of companies represented stays at 500, according to a press release. S&P said the change will take effect after the close of trading on Sept. 18 to coincide with a quarterly rebalancing.

While the change won’t matter to most investors, the new methodology comes at a time when a growing number of companies are using special share classes to bolster the control of founders. S&P is making it easier to see those categories within its indexes. For instance, Google’s influence in the S&P 500 is broken down into a 1.02 percent weighting for its Class A shares and a 0.98 percent stake for its Class C shares.

“I’m hard-pressed to believe it’s going to have a material impact on things,” Todd Lowenstein, who helps manage $16 billion at HighMark Capital Management Inc., said by phone. “It may squeeze some of the spreads between some of the share classes, to the extent you’ll have index owners willing to buy newly included share classes. Whereas before those may have traded at a discount because there wasn’t enough buying power behind them.”

In each case, S&P Dow Jones is adding classes of shares that exist to give additional control to company insiders. Google, the world’s largest Internet-search company, announced its split in April 2012 to create nonvoting stock that could be used for things like takeovers without diluting the influence of its founders.

Berkshire Hathaway

In all, 13 companies in the S&P 500 have two or more publicly listed share classes, though not all of them are reflected in the index. Decisions on whether to include classes will be made on a case-by-case basis that take into account liquidity and float criteria, according to the release.

Warren Buffett’s Berkshire Hathaway Inc. will continue to be represented in the index solely by the Class B shares, S&P Dow Jones said, citing turnover and liquidity concerns. The Class A shares, which are convertible at any time into 1,500 B shares each and hold 10,000 times the voting rights of one of the lower-priced securities, trade for more than $215,000 each.
S&P Dow Jones’ action has the effect of shining a brighter light on the dual-class arrangements, according to Lowenstein.
“You can put some sudden light on areas of opacity — that tends to be beneficial to markets because investors have more information,” he said. “You can theoretically value and judge things better. That’s a huge positive development. ”

Developed Markets View: DMMV World Stock Indexes: WEI S&P 500 Market Map: SPX IMAP Top Stories on Stocks: TOP STK Equity Screening: EQS Graphing: GRAPH Feature Stories on Stocks: TNI STK GREET To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net Chris Nagi