Google buying Tesla soon ... Would be a shame though!
Google splits into GOOG and GOOGL today
111–120 of 151 posts
Re: Google splits into GOOG and GOOGL today
#112Earlier quoted context omitted.
Interestingly the size of WhatsApp (the team and the required hardware) compared to its userbase might actually be one of the reasons why the price went so high. In other words, - they had a very good engineer to end user ratio.
Oh please, the companies are being bought out not because of some engineering masterpiece, but for already checked and working idea + loyal userbase.
I think the parent meant that in terms of a technical cost to user count ratio.
Re: Google splits into GOOG and GOOGL today
#113This 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.
I understand why we have dual-class share structures. There are cases in which investors may trust management more than their fellow shareholders.
Yet I am concerned about the structures' dynastic qualities. Larry Page is a competent executive. That may not be the case in 40 years. Tom Perkins's letter to the editor comes to mind [1]. The question of what happens after Page is more troubling. Limiting control to the founders' offspring is concerning. Granted, there are valid counterexamples. Warren Buffett is as old as he is wise. And Samsung seems to be plodding along just fine despite its family's feuds.
But shareholders should have input into these issues. Perhaps the super-voting stock lapses to normal stock after its original recipient's demise. Or maybe non-voting shareholders have one right: the right to call and vote on motions of no-confidence. Such motions, if passed by a super-majority of subordinated voters, would collapse the super-voting stock to normal stock.
Aristocracy runs thick in the veins of European business. It is worrying that we may be sprouting our own contractually-annointed Silicon Valley royalty.
[1] http://online.wsj.com/news/articles/SB1000142405270230454950...
Re: Google splits into GOOG and GOOGL today
#114This 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.
Google wouldn't have paid $20 billion for Whatsapp, and the only reason Facebook did is because their stock is very overvalued, and Zuckerberg knows that, so he's taking advantage of it while he can. Google's stock isn't that overvalued, if at all so they can't buy apps with $20 billion of what is basically "play money".
This 100 times
Re: Google splits into GOOG and GOOGL today
#115This 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.
Muscled? I mean... not to rain on anyone's parade. Perhaps someone just came to their senses? 19 billion dollars, for a messenger app, is more than just a little bit ridiculous. It's the kind of ridiculous that will be a runner-up in wikipedia for most idiotic business move ever.
Think about it this way: 19 billion dollars for a messenger app doesn't happen without at least two very motivated bidders competing.
Re: Google splits into GOOG and GOOGL today
#116Earlier quoted context omitted.
> "Ownership" without control gives you precisely nothing This statement implies non-voting stock is worthless. That is untrue. There are people willing to pay good money for nonvoting stock. Imagine a dual-class share company. Class B shares cannot vote. Class A shares can vote - they own 100% of the vote share. But both classes are pari passu in economic terms - if Class A gets a $1 dividend Class B must receive th…
Is there anything Larry and Sergey could have done when they first set up the shares that would have avoided (or delayed) having to do a stock split? e.g. given the Class B shares 20 or 100 votes?
Yes - they could have issued the Class A without any votes from the start. That would have avoided the split. They could have also, as you said, given their Class B shares more votes per share. That would have delayed the split.
Re: Google splits into GOOG and GOOGL today
#117If you're in GOOG options, it's going to get goofy. http://www.cboeoptionshub.com/2014/03/28/goog-get-ready-next...
Also, if you have a "stop loss" orders then I think it is worth cancelling them. I'm not sure if they are smart enough to pick up on splits.
Re: Google splits into GOOG and GOOGL today
#118Earlier quoted context omitted.
Muscled? I mean... not to rain on anyone's parade. Perhaps someone just came to their senses? 19 billion dollars, for a messenger app, is more than just a little bit ridiculous. It's the kind of ridiculous that will be a runner-up in wikipedia for most idiotic business move ever.
People thought the same about YouTube, but that turned out to be a brilliant (and very profitable) move. Then again, they also thought the same about AOL/TimeWarner, and they were absolutely right then. It's usually pretty futile to try to predict the future. I can see Zuck's reasoning with the Whatsapp purchase, though, and I don't think he's insane. He and Larry probably understand the structure of the tech industr…
"He and Larry probably understand the structure of the tech industry a lot better than most people."
They don't need to understand it - they define it.
Re: Google splits into GOOG and GOOGL today
#119"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.
> "Ownership" without control gives you precisely nothing This statement implies non-voting stock is worthless. That is untrue. There are people willing to pay good money for nonvoting stock. Imagine a dual-class share company. Class B shares cannot vote. Class A shares can vote - they own 100% of the vote share. But both classes are pari passu in economic terms - if Class A gets a $1 dividend Class B must receive th…
Would you say a dividend is less likely to be paid out after this? Assuming most of the voting shares are Google employees (management) is there reason to pay a dividend over just increasing their own salaries?
That seems simplistic because dividends are (iirc) better tax-wise than salary, but it seems having to match the dividend to non-voters might offset that? I know Google and the people I'm talking about are technically different, but they completely control Google's votes so does that really hold in practice?
Re: Google splits into GOOG and GOOGL today
#120Bad 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/…
Does it mean the existing employees who hold shares are going to get lesser value for their shares after split?