Google Faces Wall Street Revolt

Fred Flange wrote to mention a Times of London article, which explains a minor rebellion against GOOG on Wall Street. The company, which has always refused to offer guidance for its stock, is now being peppered with requests to do just that. From the article: "Sergey Brin and Larry Page, Google's founders and biggest shareholders, made plain in their listing prospectus that the company would reject many of the orthodox methods of doing business with Wall Street and instead adopt a mantra to encourage its employees to do good and not 'evil'. Other Wall Street analysts last night were also preparing reports that agreed with RBC, The Times has learnt. 'The time has come for Google to step into line,' one analyst said. 'It is in the interest of all shareholders, including the company's employees and officers, that the share price achieves some stability.'"

Comments

Caveat Emptor

[ausoleil]

It's really simple: as long as Google follows the letter and spirit of the law, then they can manage their company as they see fit under the direction of their board of directors.

Should investors prefer another philosophy they can replace the management team.

If they cannot do that, then they can sell their stock and not be involved with Google any longer.

It's really pretty simple. Analysts have no power within a company other than to make suggestions to management and to offer guidance to investors. They cannot compell Google to do anything whatsoever, so they may as well deflate their chests and get over themselves.

Quaterly guidance != Quarterly statements

[VP]

You either have diminished comprehension abilities, or you are trolling.

Google cannot legally not publish quarterly statements - they are doing it, period. What they are not doing is predicting in advance what these statements will be, which has always been a guess. All the information you are talking about is available in the SEC filings every quarter.

Re:Analysts say "Boo Hoo"

[AKAImBatman]

No, I understand the dynamics quite well. Legg Mason owns 4.3 million Class A shares, or about 2% of the company. Google insiders hold 271 million shares, of which 238 million are Class B "preferred". Class B shares get 10 votes to every 1 Class A share, making Legg's voting power 4.3 million votes to Google Insider's 2.4 billion votes.

Thus Google is in a perfect position to tell each and every shareholder in the market to, "buzz off." Even Fidelity and Legg Mason.

That's FUD

[TubeSteak]

All your comment shows is that you don't know how insider selling works or that you're purposefully trying to stir up a conspiracy.

I suggest you read this article.
http://news.com.com/2102-1030_3-6030223.html

Summary: Their stock sales were planned over a year advance. They actually setup the schedule before Google went public, so that n00btards like you wouldn't be able to say "ZOMG, teh c0nsp1racy!"

AFAIK, just about every corporate officer signs up for a 10b5-1 plan so that they don't have to deal with accusations of insider trading. The funny part, is that the linked article I gave you has some idiot analyst saying the same thing you are.

Allow me to say this again: The stock sale was planned over a year ago. It is an unfortunate coincidence that their stock sale happened at the same time as any bad/good news.

The fact that Google's stock dropped 60 dollars per share in less than 10 seconds is interesting, but the rest of your post is over rated.

Wall street

[MECC]

Google is just following good business practices in refusing to adopt a short-term earnings business slanted model. Since wall street wants to predict and analyze something they have no fundamental clue about, even with guidance they'd make bad predictions, which is bad for everybody. For Google to do things 'the wall street way' would substancially hurt their profitability, and be irresponsible to their shareholders, to whom they actually are responsible. For a business to become so dependant on Wall street capitalization that they change how they do things to suit wall street is likely a death knell or a sign of a long downward slide. People who know nothing about how to run a business should have zero say, especially in terms of short term considerations, which are by definition what WS deals with.

Other companies that run their own business without WS intervention (i.e. no earning guidance): Coca-Cola, Gillette and The Washington Post.