Comments on: Google’s evil stock split

By: Cage3432

Cage3432 — Wed, 30 May 2012 22:02:25 +0000

For a great read on GOOG and to understand it properly, visit, vippennys tocksite . com

By: NoPCZone

NoPCZone — Wed, 18 Apr 2012 20:26:36 +0000

‘Do no evil’ has become ‘DO KNOW EVIL’.

By: Fred32

Fred32 — Sun, 15 Apr 2012 23:45:09 +0000

As a small investor, its pretty obvious to me that my votes have a minimal effect. I know that the smart thing for me to do is to vote with my money, i.e. buy stocks of companies where I believe in the management. The only people whose votes matter are the big Wall Street banks and hedge funds, who are focused on short term results rather than the growth of the company. This kind of short term focus is part of the reason that Yahoo! is doing so poorly. For once I would like their board to talk about making better products rather than “increasing shareholder value”. I’m sure that Larry and Sergey saw what happened to Yahoo! and decided not to go down that road.

By: Curmudgeonly

Curmudgeonly — Sat, 14 Apr 2012 19:17:50 +0000

Sounds like they’re doing this to enable future deals and incentives with non-voting stock. Existing shareholders aren’t diluted. Larry and Sergey and Eric agreed they wouldn’t sell non-voting shares ahead of voting shares (although it will be interesting to see how ironclad that is, if they can use swaps, change the deal down the road etc.). You can’t even say the future recipients of those shares are getting screwed, since they will be entering into any deal willingly and knowing the price of the non-voting shares.

Really, the only argument is that entrenched control with multiple classes/big voting disparities is just a bad idea.

By: t_parker16

t_parker16 — Sat, 14 Apr 2012 12:35:22 +0000

I can’t understand the arguments here. Google is going to issue one share of X for each share of GOOG. If the market thinks that X is evil or worthless, it can split the value between X and GOOG as 40::60, or 25::75 or 0::100. How is this evil?

By: MrRFox

MrRFox — Sat, 14 Apr 2012 03:30:00 +0000

Entrenched management is not a good idea IMO, but that doesn’t necessarily mean it’s always wrong or unjust.

These 3 guys created this company from nothing. The 500-shareholder rule forces them to go public, and then other rules serve to compel them to surrender control to people of the ilk Danny Black has a “thing” for – the same people who coined the term “muppet”.

Avoiding that through legal means isn’t something inherently wrong, in my twisted (as per 5thDecade’s assessment) view of justice.

By: JeromyEvans

JeromyEvans — Sat, 14 Apr 2012 01:33:09 +0000

This is a good story Felix and I think management’s intention to entrench themselves is accurate. However if you consider what may be in Google’s long term plan (20yrs), they must intend to become a *mammoth* company. There will be big acquisitions and mergers (acquiring faltering telcos and media companies and photo sharing apps) and dilution of control must be a genuine long term risk to the management team. It seems appropriate to create a non-voting share class and try to push those deals into that class when they can.

By: pkasting

pkasting — Fri, 13 Apr 2012 22:51:24 +0000

Sechel, this doesn’t dilute existing voting rights. The number of voting shares and the voting power they have is not changed at all by this plan.

By: mockmyberet

mockmyberet — Fri, 13 Apr 2012 20:36:51 +0000

http://en.wikipedia.org/wiki/Don't_be_ev il

By: ahjay

ahjay — Fri, 13 Apr 2012 17:50:20 +0000

Politicians tried previously eliminate 500-rule to 2000-rule excluding employee options to accommodate Facebook not go public…

Interesting read below..

http://finance.fortune.cnn.com/2011/11/0 8/ending-the-500-shareholder-rule/

- A jay

By: Strych09

Strych09 — Fri, 13 Apr 2012 16:49:14 +0000

I agree with GRRR on this one. This is a preemptive move to thwart future Carl Icahns, the 72-year-old corporate raider turned hedge-fund manager and shareholder activist, who started terrorizing Yahoo’s management in 2008. Good for Larry, Sergey and Eric for getting this out of the way now.

By: Sechel

Sechel — Fri, 13 Apr 2012 16:35:13 +0000

Follow up comment @ Felix
Thinking back at those companies that offer dual voting shares. How many of them have out-performed the market? Seems to me these are managers who do not want to be accountable. NY Times and Dow Jones comes to mind.

By: Sechel

Sechel — Fri, 13 Apr 2012 16:33:34 +0000

This is a heinous idea. It’s bad but understandable when a company issues new shares this way, but to dilute existing owners voting rights is sinister. That the board of directors who is there to protect the existing stock holders signed on to this is far worse and a very good reason to dump the stock. The SEC appears silent on this. And some guy on CNBC touted as the #1 Google analyst down-played the significance.

By: najdorf

najdorf — Fri, 13 Apr 2012 16:18:13 +0000

I’m not thrilled with this plan, simply because I don’t want to track two different Google holdings and worry about the price spread between the two, but it is meaningless for control purposes and so says more about L+S+E’s paranoia about losing control. If they do this split, the balance of votes between public-insiders doesn’t change by 1 vote on the next day. Everyone gets a class C share. Pretend it’s a debt without priority if you want. Everyone still has the same Class A and Class B votes they had before the split. No entitlement is taken away from anyone. If insiders sell their C shares but keep their votes, well, do you really think they couldn’t have found a way to do that without a new share class (forward sales, non-recourse debt secured by shares, etc.)?

I guess you can argue that future use of Class C shares for deals is evil, except that Google is going to be entering these deals at arm’s length. So if they buy out some company that makes lame photo-editing software to replicate the effect of using an obsolete $50 camera from the ’70s on your smartphone and those guys are willing to take non-voting stock…who cares? If someone applies to work at Google and gets told “Hey, we only want to give you economic exposure, without the meaningless votes on corporate acts, which by the way is an area where we have always done whatever made sense to us and our company is less than 15 years old and worth like $200b so we think we’re doing ok” and still wants to work there…who cares?

By: AngryInCali

AngryInCali — Fri, 13 Apr 2012 16:16:20 +0000

Denying Davos attendees great coffee sounds pretty righteous to me. It’s too bad for the locals caught in the crossfire, but their lives are presumably made hellish by the conference already.

I don’t like the split, and I think the “but we told you” excuse is tired, but I still respect the guys for telling people to not buy the stock if they don’t like the voting scheme.