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Google splits into GOOG and GOOGL today
51–60 of 151 posts
Re: Google splits into GOOG and GOOGL today
#52Earlier quoted context omitted.
> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value i…
Right. "Ownership" is a really fuzzy thing; in the context of owning shares of a public corporation it gives you the right to be treated equally (in some senses) with other shareholders, standing for shareholder lawsuits alleging breach of fiduciary duty, and most importantly the right to select the board and vote on certain proposals. No voting rights takes away the most important component.
Surely the most important thing of share ownership of public corporation is that you are eligible to future dividends?
Re: Google splits into GOOG and GOOGL today
#53"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.
> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value i…
The problem with this saying that "courts side with directors the vast majority of the time" is that it ignores which parties are involved in the lawsuits. In most cases, the suit is a class-action brought against the corporation by disgruntled current or former shareholders; employees are not parties to the suit. In this case, the petitioners are seeking restitution which will come out of the pockets of the current shareholders, as the corporation may be forced to pay them, thereby reducing the corporation's assets and total value.[1] If you are interested in this issue, you should read up on "Halliburton v. Erica P. John Fund", which has been argued this Supreme Court term and not yet decided; many interesting arguments are contained in the various briefs.[2]
[1] http://www.forbes.com/sites/realspin/2014/03/04/the-supreme-...
Re: Google splits into GOOG and GOOGL today
#54"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.
Shareholder accountability is pretty much bogus. The only shareholders who have ever had a real say are those who owned vast quantities. The flood of blind investing through retirement funds has further diluted shareholder influence to little more than demanding increasing share price.
>The flood of blind investing through retirement funds has further diluted shareholder influence to little more than demanding increasing share price.
But this is the only thing shareholders have the right to demand anyway. As long as they can ensure the CEO and board of directors are maximizing share price, the system is working.
Re: Google splits into GOOG and GOOGL today
#55"The much-awaited Google 2-for-1 stock split is finally happening on Wednesday when shareholders of record as of March 27 will get two shares for every one they owned." Out of curiosity what happens if you bought shares on March 28th? Does your stock price just go to $600 or can you petition Google to have the new Class C shares issued to you to make up the loss in price?
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Re: Google splits into GOOG and GOOGL today
#56If you're in GOOG options, it's going to get goofy.
http://www.cboeoptionshub.com/2014/03/28/goog-get-ready-next...
Re: Google splits into GOOG and GOOGL today
#57Bad news for Google shareholders in the long run. Companies with multiple share classes having different voting rights tend to underperform companies with stock that is one share, one vote.
Please note: that doesn't mean Google won't do well, but that on average it's likely to do worse for shareholders than if all stock had the same voting rights.
Since someone is sure to ask for a citation, http://irrcinstitute.org/news/multiclass-voting-companies-un... It's not the only study that has found this.
Re: Google splits into GOOG and GOOGL today
#58"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.
Why would it be better to own stock in a company subject to the control of ever-changing third parties whose goals and motivations I cannot know?
At least if I bought Google stock (which I never have directly), I'd know my investment would be shepherded by three specific individuals whose characteristics and motivations are at least not entirely mysterious, nor entirely in conflict with my own, until they decide it is appropriate for that control to change.
Re: Google splits into GOOG and GOOGL today
#59"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.
Why would it be better to own stock in a company subject to the control of ever-changing third parties whose goals and motivations I cannot know? At least if I bought Google stock (which I never have directly), I'd know my investment would be shepherded by three specific individuals whose characteristics and motivations are at least not entirely mysterious, nor entirely in conflict with my own, until they decide it i…
>Why would it be better to own stock in a company subject to the control of ever-changing third parties whose goals and motivations I cannot know?
Actually motivation of the board of a typical is well known: to get as much money as possible. Most of public companies are owned by institutional investor, i.e. mutual, pension, hedge, etc funds.
Re: Google splits into GOOG and GOOGL today
#60Is it only in the US where it is allowed for stock shares to have no voting power? Because I think this couldn't be done in HK or UK stock market.
I traded in Russian stock exchange and many companies had "preferred" stocks which didn't have voting rights. Usually, they are traded substantially lower than "normal" stocks.