Google co-founders Sergey Brin and Larry Page each plan to sell 5 million shares of their common stock in the company over the next five years. According to an SEC filing, this is part of their respective "long-term strategies for individual asset diversification and liquidity." Larry and Sergey - as the filing actually refers …
They foresee the looming antitrust actions and are trying to cash out before the stock price takes a dump.
Not so fast
If that was the case they would have been offloading much more.
That is by the way much less than offloaded for example by let's say Paul Allen when he disengaged from MSFT prior to MSFT's court actions.
Do you notice that there is an SEC filing? Do you know the reason? People with power within a company just cannot sell their stock on a whim. They have inside knowledge and by selling stock with that knowledge, they could violate inside trading laws. This is why they need to file with the SEC to sell stock and they just cannot file today and sell tomorrow.
If they expect to the ship to sink, they wouldn't be planning five years out and even if they did, it would be much more of the stock they have.
They would sell it faster if they could
Yes they can physically sell it, but realistically, no.
This represents roughly 10% of their holdings, which falls within the hey even a rich guy wants to cash in and spend some of his money. And after Enron, Worldcom, Tyco etc no one smart has all their investments in one stock.
I'm sure they would cash out more shares at this unsustainable monopoly backed stocked price, but the more the sold, and the quicker they sold them the more speculation there would be.
Other traders would catch wind of this and everyone would start selling shares QUICK, the price would tank so fast, that they may actually have trouble finding brokers or firms willing to buy shares at any price. The same has always true about Bill G'S fortune, he can't really even cash out half of it in his lifetime without devaluing it.
Which is part of the reason an Estate tax makes such good sense. Yanks originally left the UK to flee that kind of entitlement and sniveling wastes of life that are produces by massive inheritance. And then the U.S goes and makes our own political, corporate and hollywood royalty, and we end up with even worse wastes of a human organs, like Paris Hilton and most of the rest of LA
Is anyone really surprised?
Seriously ... does anyone with a clue about reality, anywhere, really believe that they have a business model that is sustainable?
I fully expect google to be a small subsidiary of $BigCo, or perhaps just a verb, somewhere before 2015. The rats are starting to bail out of the sinking ship. Look to see google share value plummet overnight on the news ...
I never understood how they started up. Who provided the initial funding before the ad-revenue came on stream. And, given how little notice I take of the ad-links, I can't see how the revenue stream can be so great. It's always looked like a bubble to me.
We've had other bubbles - .com - global crossing - clinton's economic miracle - the military profits from the iraq war. I begin to think that Microsoft is showing signs of de-bubbling.
And Google? a bubble? are the lads cashing in before it's too late? or just because they are getting older and it's time to make provision for old age?
I've been thinking too much. I need a beer.
They have an excellent business model, sure how much did they made last year - in the middle of the great depression mark 2?
Seriously mate, nuffink wrong with google.
"They have an excellent business model"
For the moment But it isn't sustainable. If my Great Aunt can figure out how to block google's revenue stream "because it's annoying and gets in the way", anybody can. And eventually, pretty much everybody will. It's called entropy.
Erm, they will keep their voting power...
...because of their evil dual-class stock structure.
Google's Class B shares, owned by Page, Brin, CEO Eric Schmidt and some directors, hold 10 times the voting power of its regular, Class A stock. That's why Google is one big pyramid scheme: if you are a plain stock owner (i.e. Class A and not on an employee stock option program), there is only ONE way to make money, and that is from positive stock development! Buy GOOG and try to sell higher.
Evil? Well, sure. Remember that Google has not paid any dividends up to now. So your chance of making money from dividends (i.e. the classical way to earn money with an investment) is zero. And this will not change unless the Class B stock owners decide otherwise. And as they do not have interest to share the money, they probably won't vote for dividends to be paid. The whole talk about "earnings per share" is just an indicator for the company development, that is irrelevant because no dividends are paid to the investors.
Those who buy and recommend GOOG are gamblers. They can not decide on the future of the company and they do not get dividends. They ONLY gain from selling stock higher (i.e. by finding the next dumb person).
Also, please note that Brin, Page, Schmidt, and some of the directors have sold already billions of stock. That's the entire purpose of Google: to enrich the owners of Class B stock.
We need an "evil Google" icon.
And your point is?
American high tech companies pay dividend once in a blue moon. As per your definition they are all a scam(not far off). Microsoft payed dividend only once over the last 10 years and it is not called a scam for some reason, but GooG is. WTF?
As far as the voting structure it is also not particularly uncommon for a Silly Valley outfit though you usually see that in Biotech (where GooG actually has interests) not in computing.
evil = making money?
Of course the purpose of Google is to make money for its founders. That's the general basis of the capitalist economy. Why is that evil?
wgae: "your chance of making money from dividends (i.e. the classical way to earn money with an investment) is zero"
Many American companies do not pay dividends, actually, quite a few British ones do not either.
Financiers claim Dividend Irrelevance Theory is a reason why not to – the market will boost the share price because of the company's stronger cash position, whereas capital gain is reduced with dividends, and shareholders who want a 'dividend' equivalent payment can offset that by selling a few shares. Also, that instead of returning cash to shareholders it is reinvested in the business to generate growth.
RE: Clueless Anonymous -> MSFT pays dividend since 2003
"Microsoft payed dividend only once over the last 10 years and it is not called a scam for some reason, but GooG is. WTF?"
Exactly: WTF are YOU talking about, Clueless Anonymous Coward?
Typical internet BS, spread by some idiot with no clue whatsoever, let alone having the basic skills to check his BS first... MSFT pays annual dividend since 2003, you fool.
As a matter of fact they are consistently INCREASING their divident, let alone paying it quaarterly: http://www.dividendgrowthinvestor.com/2009/02/microsoft-msft-dividend-stock-analysis.html
Stop spreading your ignorant moronic crap, please.
Just checked on a couple of popular companies. IBM, MSFT, TWX, HPQ, ORCL pay dividends. AAPL, YHOO, JAVA do not pay dividends. Dunno whether those who do not pay dividends have a two-class voting structure, but the combination of "not paying dividends and not giving voting power" is highly suspicious in my view.
Paris, because it's just about the money honey.
RE: Au naturel
"Many American companies do not pay dividends, actually,"
And, actually I think even more DO including such giants like BP, Goldman Sachs, AIG, Microsoft, IBM, Intel, HP etc - heck even Ford used to pay IIRC...
BP - American.
The very subtle clue is in their former name, 'BRITISH Petroleum'
HP do pay dividends
as en ex-HP employee who still retains some HP shares, I can state that they do pay dividends and allow me to vote.... check your facts!!
RE: BP by Scott Mckenzie
"BP - American.
The very subtle clue is in their former name, 'BRITISH Petroleum'"
No shit, really?
You haven't managed to read the post I was replying to, have you, Capt Obvious?
HINT: the part about "Many American companies do not pay dividends, actually, quite a few British ones do not either."
And here's the China answer you were looking for..
Just imagine for a moment that Google would have admitted it didn't make the inroads into China it thought it could make, and that it admitted it didn't make the profits it was expeting in one of the biggest potential markets outside the US. Got it?
Now imagine what that would do the the stock price, and do that times 5 million.
Worth kicking up a stink to camouflage that, isn't it?
The beauty is that everyone fell for it as well.. Quite evil, really.
The sale may drop them to 49% but their stock options will bump them back up to 51% I expect...
... b'stards. That is all.
...as demonstrated by Reg commenters.
Biting the Hand that Feeds you, leaves you Starving and not Thriving and that is not Smart.
Why all the hostility to Gigantic Entrepreneurs with Wonga? The Smarter Dudes and Chicks would be surely Flashing their Goodies to Capture their Hearts and Interest and Undying Support Ideally, and with something of course, which will increase their Stock and Trade Value Immensely, would Ideally be the Root to Guarantee Manna from Heaven. And if the Google Algorithms are working as they should, they will already know who is Hot and worth a Fortune and Worthy of their Wacky Largesse. :-)
Hands up all those....
Who really wouldn't like to wake up one day, go to their PC (or Mac if you must), log into Internet banking and see 5.5 billion sitting in their account?
Although I'd like them to cash out and shut down Gobble.
Market Cap is just paper, it's not cash in the bank ... We shall see what happens when the principles start cashing out.
I have no cash interest in this, BTW ... Tulips & Holland & the mid-1630s & all that ;-)
.... The Key AI CodeXSSXXXX Number for the SMARTer MaJIC Investor Giant into Ace Protocol Plays .... APPs
"Hands up all those....Who really wouldn't like to wake up one day, go to their PC (or Mac if you must), log into Internet banking and see 5.5 billion sitting in their account?" ...... pctechxp Posted Sunday 24th January 2010 23:19 GMT
More than a little less to the right Global Operating Devices Account would also work ITs AIMaJIC MoJo and Virtualised JuJu for and to the Greater Benefit of Google BI GCHEESES Doing their Thing, Precious Little and No Evil in Live Operational Virtual Environments.
It is rather SurReal is it not, to Realise that a Simple Well Thought Out and Exercised Idea, which Always, both Virtually and Really Costs Nothing, because IT is just Beta Advanced Intelligence Systems Sharing, Sharing that which IT Knows of the Unknown, to those who would be More than Just a Tad Interested in the Control of the Power of Knowing the Unknown, and Presenting IT for the Future, is so Valuable an Addictively Attractive Analytical Algorithm worth ............ well, Priceless Gazillions actually, rather than even Billions, although why Anyone to be Perversely and Obscenely Richly Rewarded with Great Earthly Capitalist System Wealth to Spend and Generate Healthy and Vital Economies would ever need more than Nine Nines to Deliver whatever was Needed, is Probably due to them not being Bright Enough or Bold Enough to be Able to do IT for Nothing Too, whenever also a Swift and Newly Minted, Fleet of Feat Billionaire.
And have you any Idea of the Immense Pleasure it would be for One in IT so Immaculately Rewarded to Ensure that the Debt of Gratitude to Those who Enable is Countlessly Repaid, Many Times Over in Spades.
Now that is a Cracker of an Algorithm to Run Both Anything and Everything with, and Most Definitely One for the ur2die4 Holy Grail Stables and Security Vault, for in the Possession of a Rival Competitor would it with IT be Overwhelming Good too and QuITe Impossible to Counter and Better.
Re: 999999999 .......
Earth to ELIZA ...
Would you please spank your kid and send it back to school? It's babbling again ...
Ta you muchly :-)
Re: Re: nines 'n dots
Actually amanfromMars has been making rather too much sense recently, nice to see him back on form.
Maybe whoever maintains him has finally got his twitter feed working and thus got his input bollocks value back up to acceptable levels?
Of all the evil you could not do with all that money.
I'm not doing any evil now but for free. I'd love to get paid for it and in return I promise to carry on not doing any evil for at least the next five years.
Does this read like hurry, to you?
I know it's so much more fun to reach for the "Chicken-Little button" - especially in comments section of The Register - but please... it's right there, in the first line, of the first paragraph - "plan to sell 5 million shares... over the *next* *five* *years*".
Since when did rats publish their "Five Year Ship Disembarkation Strategy"?
(Personally, I see the fact that they haven't stated their intention to carry on running things beyond 2038, as clear evidence that they are worried about the 32--bit time problem - and, worse: that they haven't got a solution to it!)
Careful what you say.
If saying what you're planning to do for the next five years in a plan up front means you can't be a complete bastard, that's Stalin, Enver Hoxha, Kim Jong-Il, Nicolae Ceaucescu and Gordon Brown all off the hook......
"Over the next five years" could mean 90% tomorrow, and 10% of the remainder at six month intervals.
I'd certainly consider doing it something like that, considering the current state of the P/E Ratio ... I mean, 23.2ish? WTF? Seriously, it's a speculation bubble, and it's going to burst eventually. They are looking to get as far out as legally possible before investors come to their senses.