Google splits into GOOG and GOOGL today • Hacker News Board

Re: Google splits into GOOG and GOOGL today

#71

Post by nknighthb » Thu, Apr 03, 2014, 5:49 AM UTC

wutbrodo wrote: post #45

habosa wrote: post #44

Earlier quoted context omitted.

Check out Comcast which has two independent stocks (CMCSA, CMCSK). They move together pretty much, off by less than a dollar right now.

Is the difference between CMCSA/CMCSK similar to the GOOG/GOOGL difference (specifically, limited voting rights) or is it a different case?

http://www.cmcsk.com/faq.cfm

CMCSA has voting rights, CMCSK does not.

(And there are also Class B shares which are not publicly traded, and have a guaranteed 1/3rd vote share. They are all under the effective control of the current President/CEO, who is the son of the original founder.)

Re: Google splits into GOOG and GOOGL today

#72

Post by yohui » Thu, Apr 03, 2014, 5:50 AM UTC

nknighthb wrote: post #58

fiatmoney wrote: post #18

"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…

> until they decide it is appropriate for that control to change

Or, perish the thought, they die* (wills aside).

* Though see: https://en.wikipedia.org/wiki/Calico_(company)

Re: Google splits into GOOG and GOOGL today

#73

Post by clarky07 » Thu, Apr 03, 2014, 5:54 AM UTC

dragonwriter wrote: post #41

clarky07 wrote: post #34

Earlier quoted context omitted.

and yet none of them make money except search advertising. it's almost all of their revenue on a percentage basis. edit: i do believe they make a bit of money with youtube now, but it is still advertising. they haven't successfully SOLD anything to date.

> and yet none of them make money except search advertising. I actually think lots of them make money -- over $5 billion in non-advertising revenue in 2013 [1]-- its just they are dwarfed by the scale of the revenue from search advertising ($50 billion in 2013.) > they haven't successfully SOLD anything to date. If they haven't sold anything but advertising, they must have just conjured that $5 billion in non-adverti…

91% of their business is advertising, 9% is other stuff including android apps, chromecast, chromebooks, fiber, app engine. The actual number is 4.927 billion for 2013[1].

They have not really had a successful product outside of advertising. Chromecast is probably the closest thing to a success out of all the other things they do. Seeing as how they don't have a single business line over a billion, I'd consider all of them hobbies at this point for a company the size of google.

Apple TV is a > 1 billion product now, and it is absolutely a hobby for Apple. Yet they have 4 different product lines that are huge businesses. Microsoft has a lot of huge business lines. Google has advertising and a bunch of hobbies. Hopefully at some point they turn into something. I'm specifically rooting for Fiber. But that doesn't mean it's true right now. It's just not.

[1] http://investor.google.com/financial/tables.html

Re: Google splits into GOOG and GOOGL today

#74

Post by tim_sw » Thu, Apr 03, 2014, 5:54 AM UTC

ksec wrote: post #48

Is 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.

This is one reason why Alibaba is listing in the US instead of HK http://www.bloomberg.com/news/2014-03-16/alibaba-to-start-pr...

'Hong Kong’s bourse doesn’t allow share classes with different voting rights, as the U.S. does. Such arrangements helped Zuckerberg and Google co-founders Larry Page and Sergey Brin keep control of their companies after they went public."

Re: Google splits into GOOG and GOOGL today

#75

Post by raldi » Thu, Apr 03, 2014, 6:04 AM UTC

If the Class C shares go to whoever held the stock on March 27, why didn't the price drop by half at the open on the 28th?

Re: Google splits into GOOG and GOOGL today

#76

Post by dirtyaura » Thu, Apr 03, 2014, 6:37 AM UTC

Tuna-Fish wrote: post #65

dirtyaura wrote: post #52

Earlier quoted context omitted.

Surely the most important thing of share ownership of public corporation is that you are eligible to future dividends?

Google pays no dividends, and by all the public information they have ever released, they never intend to.

Apple never paid dividends under Steve Jobs but now they pay dividends.

Re: Google splits into GOOG and GOOGL today

#77

Post by donaldc » Thu, Apr 03, 2014, 6:49 AM UTC

ericd wrote: post #69

donaldc wrote: post #63

Earlier quoted context omitted.

Yes, but eventually they'd have issued enough class A shares to make the class B shares less significant. Now Larry and Sergey can keep their majority votes safe forever. In the long run, to the likely detriment of Google shareholders.

Says who? I'd much rather have long-viewed leaders running the company than a horde of outsiders looking to maximize short term gain and flip their positions. This seems like great news for long term investors.

Says the study I cited, which compared historical shareholder returns for companies with stock voting arrangements like Google's to companies having one class of stock that each has one vote.

Re: Google splits into GOOG and GOOGL today

#78

Post by outside1234 » Thu, Apr 03, 2014, 6:52 AM UTC

tl;dr: Google is acting like an Asian company and pretending to be a publically owned company while screwing shareholders out of voting rights.

Re: Google splits into GOOG and GOOGL today

#79

Post by sillysaurus3 » Thu, Apr 03, 2014, 7:00 AM UTC

therealarmen wrote: post #26

This is meant do to one thing -- let the founders retain control while allowing for large stock acquisitions. It's possible Google was muscled out of the Whatsapp deal simply because they couldn't pony up the money. $20B is almost half of their cash on hand. Note that the Nest and Waze acquisitions (small in comparison) were paid for almost entirely in cash.

Did FB pay $19B for Whatsapp in order to prevent Google from acquiring their userbase? That is, FB got into a bidding war with Google over Whatsapp?

Re: Google splits into GOOG and GOOGL today

#80

Post by ericd » Thu, Apr 03, 2014, 7:03 AM UTC

donaldc wrote: post #77

ericd wrote: post #69

Earlier quoted context omitted.

Says who? I'd much rather have long-viewed leaders running the company than a horde of outsiders looking to maximize short term gain and flip their positions. This seems like great news for long term investors.

Says the study I cited, which compared historical shareholder returns for companies with stock voting arrangements like Google's to companies having one class of stock that each has one vote.

I skimmed it, it seems a bit suspect, holding up as evidence that four relatively recent tech IPOs have dropped since their debut, and the original research was conducted by what sounds like a shareholder advocacy group. Zynga, Facebook, and Groupon didn't drop because of the share structure, and it's disingenuous to suggest that that was a probable reason.

I've seen the damage that focus on short term share price wreaks on companies in the long run - it's paralyzing, as they're forced to focus on the wrong things. Activist shareholders seem to focus on short term returns. Not being subject to that, and being able to focus on long term initiatives seems very beneficial for long term shareholder value as long as you have a good leader.

But that good leader caveat is a big one. Multiple share classes might be correlated with having a bad leader.