tag:blogger.com,1999:blog-8152901575140311047.post3582734696488931917..comments2024-03-28T12:49:46.624-04:00Comments on Musings on Markets: Google splits its stock and spits on its stockholdersAswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-8152901575140311047.post-57693133909949026192013-08-25T04:17:52.759-04:002013-08-25T04:17:52.759-04:00I don't see this as that bad, I think it has i...I don't see this as that bad, I think it has its advantages in a falling market place.manicuregirlhttp://beautysalonscornwall.com/beauty-information/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-23410031052458689072013-03-15T01:17:30.347-04:002013-03-15T01:17:30.347-04:00This is a very intriguing post, I was looking for ...This is a very intriguing post, I was looking for this knowledge. Just so you know I found your web site when I was searching for blogs like mine, so please check out my site sometime and leave me a comment to let me know what you think<br />Investing stockshttp://www.sanasecurities.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-55230099785118800222012-12-11T13:43:56.721-05:002012-12-11T13:43:56.721-05:00Maybe its about time for apple to do a stock split...Maybe its about time for apple to do a stock split. Since google is getting into the act.QUALITY STOCKS UNDER FIVE DOLLARShttp://www.manta.com/c/mxcpkb3/the-manhattan-calumet-value-stock-hotlinenoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-949186917428591452012-05-06T01:35:30.240-04:002012-05-06T01:35:30.240-04:00In my view minority shareholders have never had an...In my view minority shareholders have never had any say in the mgt or corp gov matters of a public co. Check it yourself when you had one. It doesnt mean that we should continue to accept; but practically it is never going to happen. That is called majority stakeholder mgt. you have effectively 2 choices: one, buy the share if you have faith in mgt and board for doing good things for the business and consequently for you; it means don't crib if your assessment is correct or not. Two, don't buy into where you have no faith; i.e. be where you are comfortable. There is no point criticizing and cribbing about things not under your control. Do what is under your control, i.e. buy, sell or hold.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-64693877098385575412012-05-05T17:42:54.635-04:002012-05-05T17:42:54.635-04:00given that large pension funds are passive shareho...given that large pension funds are passive shareholders - one feels like one is choosing between ceding control to activist shareholders (e.g. the Icahns of the world) and founder-owners. if you buy that (slightly jaded) point of view - founder-owners generally seem to come out ahead ..arsene lupinnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-80503011553950423342012-05-01T21:28:31.933-04:002012-05-01T21:28:31.933-04:00Curious, does this stock split affect the employee...Curious, does this stock split affect the employees of Google who have stock vesting plans awarded as part of the compensation?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-6536523732031595402012-04-18T07:55:03.204-04:002012-04-18T07:55:03.204-04:00GOOG split has to do anything with implications of...GOOG split has to do anything with implications of forthcoming facebook ipo!!!Raghavendra A Ravurihttps://www.blogger.com/profile/02465688994618370049noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-37721043007099004812012-04-17T00:08:48.790-04:002012-04-17T00:08:48.790-04:00Excellent analysis, however a bit out of place for...Excellent analysis, however a bit out of place for the present time.<br /><br />GOOG has given an option to the shareholders. If you do not approve their governance, you can run for the exit and invest somewhere else.<br />And they are forthright in their announcement. <br /><br />Compared to the Wall street firms (Goldman et al), GOOG management appears harmless. The Goldman thugs are destroying the world economy with their shenanigans. Using derivatives, they helped Greece govt. hide their debt and god knows where else they are looting the public. However, very little is known about this. <br /><br />Professor, why don't you write about this and educate people? The biggest danger of the time is sovereign debt/default. Compared to this, the GOOG incident is nothing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-10648845251087587162012-04-15T12:07:47.722-04:002012-04-15T12:07:47.722-04:00Prima facie, this concentrates voting power but pr...Prima facie, this concentrates voting power but presumably has no effect on the static value of stock. <br /><br />Thinking about it from another angle: clearly, part of the value of an equity comes from the voting power. How does this impact the dynamics of the value of a vote embedded in the equity? <br /><br />In such a structure, esp. where the superclass shareholders have ability to issue additional no/low vote-class shares, I would think that the superclass has the power to increase the embedded value of the vote (which they own) simply by issuing more no/low-class shares. In this way, can they transfer value from other classes to themselves? And, if so, is his not minority shareholder oppression?M Chitnishttps://www.blogger.com/profile/07594337234761850310noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-1759232025766028092012-04-15T02:13:53.652-04:002012-04-15T02:13:53.652-04:00Prof Aswath,
In addition to the two areas of imp...Prof Aswath, <br /><br />In addition to the two areas of impact of stock splits you have talked about, I'd like to propose a third. <br /><br />Could it be that Google, through its split is actually inviting a certain profile of investor - someone who is ok with the company taking big risks in the short term for long term disproportionate gains. Assuming that this works, over a period of time Google's shareholders will predominantly belong to this type, and the rest will leave for more suitable pastures. This in turn could bring some stability to Google's stock price. (It's a bit like your argument about Apple attracting the WRONG kind of investors through dividends. Could Google be trying to attract the RIGHT kind of investors?)<br /><br />Regards,<br />MohitMOHIThttp://mohitk.weebly.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-1428656713749450122012-04-14T20:31:59.426-04:002012-04-14T20:31:59.426-04:00Thank you for the article. One small (potentially...Thank you for the article. One small (potentially naive)question on your Intrinsic Value excel of Google: Should you use MV Debt as opposed to BV of debt when calculating the equity value? (maybe BV=MV in this case, not sure).<br /><br />Thanks for your time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-36240555776172343852012-04-14T12:00:39.645-04:002012-04-14T12:00:39.645-04:00Evil is too strong a word to be throwing around. H...Evil is too strong a word to be throwing around. How about motivated by self interest, as we all are?Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-67389398154993590852012-04-14T10:14:14.518-04:002012-04-14T10:14:14.518-04:00Would you call Warren Buffet an evil old man. He ...Would you call Warren Buffet an evil old man. He pays less tax than his secretary & reserves the right to exploit his minority shareholders through BRK B shares which carry low voting rights. Its better only by degree compared to GOOG. Perhaps Buffet can be trusted; he has earned it. But is a structure which permits explotation of minority sensible succession planning? How would Sokol have handled the power? Its bad governance & regulators should not permit it; they must act when shareholders wont.Shivhttps://twitter.com/#!/QuantReportnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-41050060023149770042012-04-14T10:09:10.133-04:002012-04-14T10:09:10.133-04:00Splits & Stock dividends will not influence in...Splits & Stock dividends will not influence intrinsic value, but there are forces that allow external gains which can be realized by shareholders to get embedded in the price of the stock; albeit for a limited time.<br /><br />For example, some jurisdictions will create a tax advantage post bonus. Or initial buying interest on a lower share price may drive share prices up; it may allow for better price discovery but more likely its will be a spike caused by increased short term demand.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-52381288677699650672012-04-13T23:36:56.950-04:002012-04-13T23:36:56.950-04:00Why do regulators accept this. Differential votin ...Why do regulators accept this. Differential votin rights, amount to the holder of the voting shares saying that we reserve the right to abuse the minority. It is not good governance & it is a failure of regulations.<br /> <br />I suppose an instrument which packages what amounts to a sale of voting rights may be okay; say something where all holders have equal economic rights except that share holders with no voting rights have superior rights (both first rights [eg. buybacks first for non voting shares] as well as premium rights [perhaps a minimum dividend of 2% subject to availability of distributable profits and additional dividends at 10% premium to that paid to voting shares]) with respect to capital returned.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-30673934187724191552012-04-13T15:36:49.250-04:002012-04-13T15:36:49.250-04:00I Agree. Arrogant move by google.I Agree. Arrogant move by google.Colinhttps://www.blogger.com/profile/11277909873311225732noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-23609382460697243032012-04-13T14:12:15.818-04:002012-04-13T14:12:15.818-04:00Yes, but I think we get the corporate governance w...Yes, but I think we get the corporate governance we deserve. As long as we do not punish companies that do this, as investors, why would they do anything different?Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-46483454898693349352012-04-13T13:44:52.485-04:002012-04-13T13:44:52.485-04:00Professor,
Excellent article. But I have a questi...Professor,<br /><br />Excellent article. But I have a question for you: Do you think that tech companies are going to ruin some of the corporate governance rules won by investors over time? Do you see a new terrible trend on that?Miguel Camposhttps://www.blogger.com/profile/08853779544734696901noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-51139897239984146082012-04-13T13:34:34.430-04:002012-04-13T13:34:34.430-04:00Excellent article. Thanks for the insight and pers...Excellent article. Thanks for the insight and perspective into splits and helping shed light on the myth that splits are always good for value.millssnellhttps://www.blogger.com/profile/03862672740873310472noreply@blogger.com