New mandatory convertible preferred stock offers 6% yield but converts to common shares by May 15, 2029.
Alphabet introduced mandatory convertible preferred stock yielding over 6%, part of an $85 billion capital raise. The new shares, trading as GOOGM and GOOGN, target income investors seeking exposure to the company’s AI-driven growth while offering higher yields than its 0.24% common stock dividend.
The preferred shares prioritize dividend payments over common stock and will convert to Class A or C shares on May 15, 2029. Alphabet’s common stock dividend recently increased to $0.22 per quarter, up from $0.20 two years ago, but remains modest compared to the new preferred offering.
Investors gain access to Alphabet’s AI leadership with a fixed-income component, though the mandatory conversion limits long-term yield stability. The structure reflects broader demand for tech-linked income securities amid elevated interest rates.