Slashdot Mirror
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.'"
If GOOG was up front with their way of doing business and it's acceptable by SEC and other relevant regulators and the analysts don't like it, then I say the analysts can kiss GOOG's multicolored ass.
Trouble making decisions? Just flip for it.
Maybe the analysts should do their own research on the company?
Is Google the only company that does not give out this information? How common is this?
I meta-moderate because I care.
It may come as a shock but Sergey Brin and Larry Page don't own the universe and while they may be masters of search they aren't masters of Wall Street. You do what the Street expects or your stock price pays the price. Ultimately, they'll give in. Almost every "outsider" makes the transistion to an insider when the door opens, no matter their initial intensions.
If the analysts can't predict, then the stock price would fluctuate.
This introduces uncertainty, and the last thing that Wallstreet likes is uncertainty. Sometimes, companies have their stock prices going up even after they've lost a major deal simply because the period of uncertainty is over.
So, this makes a lot of sense - Google is causing uncertainty in the price, and that is definitely not good for GOOG's shareholders (or for Wallstreet, for that matter).
"I find your lack of faith disturbing"
Stay strong, Google! You may do things we don't like ocasionally, but you're still a wonderfull breath of fresh air in this rather stagnant world...
Z
What do they get paid for? Regurgitating whatever the company says?
A listed company doesn't have to provide guidance. However, they do have to make all information equally available to all investors.
What Wall Street dislikes is that Google is pointing out how moronic they really are.
Tell 'em to
1) get bent
and
2) do their own work, the lazy bastards.
Love,
Justin.
You're only jealous cos the little penguins are talking to me.
... is just how close to the mark this guy is?
It was a fun ride, but the Wall Street community is large and powerful. All the power to Google if they can hold out, they made all the right moves, but eventually the "can't fight city hall" mentality will creep into the workforce and stifle new creativity. The employees will start working for next quarters results instead of the grand plan envisioned by the company heads.
Stay tuned for new sig...
Simply put: when you become a publicly held company you have a responsibility to your shareholders. Until upper management learns this, their stock price is going to continue to decline sharply.
How exactly is it an "evil" thing to be open and honest with your shareholders rather than asking them to trust in your "master plan?" That's like listening to the guy in the back alley who says "trust me, just close your eyes." Shareholders are going to become frustrated and begin to unload their shares as they realize that they own hugely inflated stock with no real idea of how the company intends to achieve that valuation on the books and not just in the eyes of stock market prospectors.
Sometimes it is better not to let these folks get a foot in the door, because otherwise you get a bunch of people second guessing what your intentions are, and advocating positions that are great for them, but not for the long term prospects of the company.
"It is a greater offense to steal men's labor, than their clothes"
Being obligated to the stockholders is not at all the same thing as being obligated to stock analysts. When Google's prospectus says "We're not going to be providing the forecasts you're used to," you have the choice to become a stockholder, or not. If you choose to buy stock, well, you've been forewarned that your stock doesn't hold much voting power, and that you're not going to get the kind of forecasts you used to, and those are matters between you and Google.
Google has no responsibility that I can see towards providing analysts with all the information they'd like to have.
And if the shareholders also say "do no evil?" I would imagine that a majority of the shareholders understand what they are getting themselves into. If they didn't, then they're buying into the wrong company. It's not as though someone is holding a gun to their head telling them to buy GOOG. That is the idea of the free market, though, right?
// file: mice.h
#include "frickin_lasers.h"
Google investors overbought a black box and they were willing to such a thing because of greed. Now that they're invested, they've decided they want to see inside that black box, despite their having known it was a black box when they bought it. Why? Greed.
Let them stare their greed in the face for a while.
STOP . AMERICA . NOW
An analyst for RBC Capital Markets yesterday was the first to call for Google to step into line with the majority of US listed companies
And who is this person to tell Google what to do? Just because they can not maximize their profit margins more easily, Google must change their ways?
He who knows best knows how little he knows. - Thomas Jefferson
Serious investors should think long term, not what this quarters profit will be. One huge problem with U.S. companies is that their upper management folks are compensated with stock options (or grants) and are often based on current performance. Why make a long term investment when you can cut current costs to make a profit now? Wall Street thinks you're making money and the stock goes up up up and you can cash in.
Google's doing the right thing telling "The Street" to fuck off.
Wall Street is still pissed off that they missed out on the initial public offering by Google going with a "Dutch Auction" where individual investors set the initial price, not a fixed price where insiders who get alloted shares can rake in freebie big payday.
Ya, I'm talking about you Goldman Sachs.
Bottom line is Google shouldn't cater to these "analysts". They all have axes to grind and pandering to them is a waste of time and money. Google should pursue success in many paths and if one of them takes years or decades to pan out, so be it.
Not that Google wasn't pulling a fast one the little guys who did invest in their company. The stock Google sold was "diluted voting rights stock". That's right, the original owners get special super duper voting power over you clowns with 100 shares.
Not.
They are obligated to do precisely and only what their prospectus, corporate charter, and public writings and speech say they will do. They are not obligated to give analysts "guidance" or play any of the other foolish games Wall Street wants them to play.
This talk of stability in stock price is just whining. It's also a key test for Google, who will now show that they are either sellouts or true idealists. While I don't hold the same ideals as they do, and don't think selling out for the kind of money they got is such a bad thing, I find the whole thing interesting as a study in human nature.
sigs, as if you care.
Exactly! The shareholders bought what they bought. They were under no false pretenses, and Google doesn't have to do a damn thing to change their practices. If the shareholders don't like it, I'd like to see them sell. I seriously doubt that many of them will actually want to take losses in the hundreds of thousands range and higher, just to make a point to Google.
Javascript + Nintendo DSi = DSiCade
"Obligated to the stockholders" means that the board can't pillage the company to line their own pockets. It doesn't, despite what everyone seems to think, forbid them from taking at least reasonably justifiable long-term stances. They're not obligated to operate on analysts' terms any more than they were obligated to operate on China's terms.
What I'm listening to now on Pandora...
I'm not a stock broker, but I do know that companies can be delisted from a stock exchange for a variety of reasons. Could Google get delisted for being too tight lipped? They've got to offer at least some guidance to stockholders in their annual reports.
I'm not saying I don't respect what Brin and Page are trying for, but they're going into a well-established arena and trying to do things in what seems to be a very unique way, an arena which is largely satisfied with the way things work. Perhaps we might see some minimum disclosure requirements added to the requirements for being listed on NASDAQ.
Frame it in the open source discussion, and some opinions might change. Isn't what analysts are calling for just like what the open source community calls for? We want to know how code works, to make sure it's doing the right things and not hiding wrong things. Isn't this what the Bush administration is criticized for, not giving guidance as to what they're doing? This is financial analysts wanting to get an idea of what's going on underneath the hood, rather than just guessing.
Again, I respect what they do, and if they push gently, they'll get something put in motion. But, if they push too hard for what they want before the market is ready for their philosophy, something might break.
Firstly, these are predominantly 'sell side' analysts. That means they do analysis to pass to their salesmen or customers to increase their trading revenue/customer retention(attraction).
;) instead of posting to Slashdot for fun).Ironically, while sales side companies want to make predictable prices and promote information disclosure, they benefit most from markets with higher volatilities (or volumes, but they're extremely linked in practice).
It is nice to have your cake and eat it. It is nice to provide reliable analysis based on facts. Plug the snippets of information you receive into a spreadsheet and press the VBA button (because all such macros are in Excel, for better or for worse). You get a reliable forecast and lots of happy customers that compare your estimates to others' and think you're good. Except eveyyone else is doing the same thing, or rather, playing the same game.
In Google's case, they play a different game. The analysts' spreadsheets don't work so well, in part because Google's business is slightly different, in part because Google take the approach to only report really important things, their methodology of re-evaluating guesses as Google's official announcement approaches doesn't happen. They twiddle their thumbs and complain about being made to play a different game.
Now, I am somewhat sympathetic to them, and somewhat not. Variance of price is important in finance. Would you rather have a mean return of $5 per year with a variance throught the year of $2 or with a variance of $1? We're talking ex-post variance here, as a predictor of your portfolio's ability at maintining value at that instant you're ready to draw it down (or add more money to), not ex-ante picking over or underbought markets (and if you can, please let me know how so I can buy a tropical island with lots of native women
As variance is important, getting a steady newsflow is also important. But I'm also in favour of taking a long term view in finance: assessing the long term prospects of a company. As such, as an investor in Google I'd not be happy if they were spending their finance department resources nit-picking every last daily cent so they can tell the market something every day - focus on the big agenda and the long term outlook and make that the priority for the company.
So it is with balance. I have no sympathy for trading sales funded wings of Investment Banks/Brokerages coming up with useless ideas daily to get more trading revenue (funded by people increasing trading), essentially creating news. But I also think steady prices are important, and if a signifant unpublicesed fact comes to light at Google, they should disclose it to their owners (as is required by the SEC). How significant is significant? Well, large enough for their long term shareholders (pension funds, insurance funds) to get upset, and well above the level of news-for-the-sake-of-it salesmen.
What bothers me about this is not that Google refuses to provide more earnings guidance, but that the investor are acting like little whiny bitches. Google told Wall Street this is exactly how they would run their company. I have no sympathy for anybody who bought Google stock expecting the company to act like the most other publicly traded company. If they don't like it they can sell the stock. Does everbody allready forget that Google told people not to expect regular earnings guidance BEFORE they went public? I'm not so sure Page and Brin car if the stock deflates all that much. The stock is over valued to begin with. But I guess in the end you can't fault wall street for trying. If they get Google to change they win. However if they don't, and Google holds strong then they just look like fools to me right now.
The shareholders and stock analysts and 10x more fickle with google than any other stock. They have turned google's stock into a big circius. And none of it is google's fault!!!!!!! They've brought it upon themselves. Why? Because they don't understand google as a company. At every announcement google stock either goes up 10% or down 10%. Google's stock has become disconnected from their actual health as a company. When people get burned bad enough google's stock will go through an adjustment period (which we are somewhat seeing now). Eventually, when people get some damn common sense regarding google stock, it will see normal market prices. I laugh when I see "google honeymoon is over". You jackasses created this false honeymoon! The only ones you have to blame are yourselves.
If an officer ever threatens to taze you, say you have a pacemaker.
See, you buy stock in a company hoping that it would not go bust, and that your share's price would increase.
Now, for someone to adequately know whether or not a particular stock is good or bad, they would most certainly need to know what the company has planned, and provide such data. You might argue that a stock-holder knew what s/he was getting into while buying the stock, but not providing enough data defeats the primary purpose that one buys the stock for.
By not providing such information, Google is leaving folks uncertain - now, honestly, if your data was good you'd release it because it would do good to your stock price. If you aren't, I'd be worried about what else is going on, and that is most definitely not a good sign.
Google's prospectus claims that the only reason they do not give quarterly guidance is because it encourages short term thinking - now, the analysts and investors would have no problem with it if Google's annual results were as good as they'd hoped. But it was not, so the analysts are claiming that if they had more information (i.e. the quarterly guidance) then this would not have happened.
Ultimately, the analysts are saying, "By not giving quarterly guidance you are not letting us do our jobs properly." While the long term investors (the kind GOOG wanted in their prospectus) may not need quarterly statements (long term investors can look at annual statements and either dump or buy), however if Google needs to survive in Wall Street, they may need to do both, since not giving quarterly statement introduces a lot of uncertainty.
Ultimately, it depends on how they want to grow. Schmidt has indiciated that they want to be a $100bn company, so for fast growth they may have to disclose such information.
Long term investors are going to be very minimal, and they seldom provide the kind of muscle that Google is looking for.
I feel that this is incorrect -- Google and its board of directors have a responsibility to ensure that the company remains stable and grows at a reasonable rate. By and large, Google is not responsible for ensuring that its share price become "stable" -- that is for the investors on Wall street to decide.
It is not uncommon, incidentally, for companies not to offer quarterly guidance. This is particularly the case with companies and in industries that are cyclical (e.g., perhaps they sell more apples in May to August, but practically none in January to April). Berkshire Hathaway offers only a single, yearly report (no quarterly updates), for, as explained by Warren Buffett (its CEO), quarterly guidance merely serves to satiate the manic-depressive Wall Street than to give meaningful insight into company operations.
I think that the fact that Google has chosen not to offer guidance is a good thing, since it is still growing its core business and may go several months with negative earnings (e.g., it might be expending lots on R&D, buying businesses, or building infrastructure) despite positive growth on a yearly basis.
'The time has come for Google to step into line,' one analyst said.
Oh yeah. Talk like that would surely get me to listen to what they're telling me to do. Boohooohooo. The analysts can't manipulate the stock as easily as they want...
This guy's the limit!
I heard a segment on NPR this morning about this. Larry Page was saying that Google wants to stay focused on the long term and that releasing these quarterly estimates would be the equivalent of somebody who is trying to lose weight stepping on the scale every half an hour. I think this makes sense. When companies release quarterly data it can encourage business practices that boost short term profits.
nothing
And that is what is wrong with business in this world today.
Nowhere, in your entire comment, is the word customer mentioned once. Companies are now beholden ONLY to stockholders. Analysts game the system quarter to quarter to make sure they GET the short term gains. Companies look to the last and the next three months, no further.
and.....
Customers everywhere scratch their heads and wonder why customer service on nearly every level for nearly every industry is absolutely abysmal. Well look no further, there is no driver anywhere in the corprate world that says they need to care.
We all know that media companies and their obsession with DRM is leading to a dangerous and eventually (in the HDTV realm anyway) huge conflict with their customers. But we can't place all the blame on them, Wall Street has told them in the loudest possible voice they have that no customer matters and all thats important is shareholder value. Its very easy to see then how the media companies (and many other companies) can go from trying to please their customers, to treating their customers like theives or like their subjects and not their true reason for being.
Google has no responsibility that I can see towards providing analysts with all the information they'd like to have.
More to the point, earnings guidance is not even actual information. It is simply a guess. Google certainly has no responsibility to provide that to analysts or anyone else.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
Ultimately, the analysts are saying, "By not giving quarterly guidance you are not letting us do our jobs properly."
And Google is saying, "you're not the people who were supposed to buy our stock. Either learn to accept long term profits, or sell now and go away."
While the long term investors (the kind GOOG wanted in their prospectus) may not need quarterly statements (long term investors can look at annual statements and either dump or buy), however if Google needs to survive in Wall Street, they may need to do both, since not giving quarterly statement introduces a lot of uncertainty.
What does Google need to do to "survive Wall Street?" Unlike many companies, Google is highly profitable and has no need for Wall Street's money at this time. The original shareholders have already made their tidy profits, so now Google can sit and wait while the market fumes over their long term strategy. The market will adjust the price of GOOG if they feel it's too high, then they'll get used to the way Google does business and continue their long term holdings.
Wall Street only has power over a company if a company needs their money. For the first time in a very long time, Wall Street is suddenly finding itself powerless. All Google has to do is not blink, and keep the prefferred shareholders happy.
Javascript + Nintendo DSi = DSiCade
I side with google on this. But their "do no evil" policy may be incompatible with the legal rights of the shareholders. Ever since Dodge v. Ford it's been pretty much accepted in the US that companies cannot practice philanthropy at the expense of shareholders.
Though we all like the idea of "do no evil", when it comes to business the idea can be very subjective.
I admit I don't know much about the stock market, but if you don't like a company's reporting or business practices, don't you have the choice not to invest in them?
The US borrows in its own currency unlike the rest of the world, so if the currency is devalued, the guy we borrowed the money from suddenly gets paid a lot less.
-mkb
"MIT betrayed all of its basic principles."
That's not breaking 'do no evil' that's "they didn't do some good that they could have done".
By the same token, I only give to two charities: I could give to lots more, but failing to do so does not make me evil.
Justin.
You're only jealous cos the little penguins are talking to me.
The analysts should earn their own salaries by analyzing Google, instead of republishing corporate PR like they do for every other public company whose stock they resell to their clients. Getting "guidance" to determine the stock price from the company profiting from the stock is almost as corrupt as publishing the "research" based on it to sell the stock at a higher price than that at which the analyst's firm bought it.
Since the brokers are demanding Google start to play their evil game, it's no surprise that the brokers also want Google to stop saying such bad things about "doing evil". Even though that "mantra" has no relevance to the stock, its info, its guidance or corporate performance whatsoever. They just want Google to stop being so different from the evil they do every day.
--
make install -not war
Usually, the purchasing company's stock price drops and the purchasee's stock price increases. A lot of folks risk arbitrage this position when news of a merger hits the street.
Risk arbitrage goes like this: sell short the aquiring comanies stock, or buy the Puts and hedge with the stock. Buy the aquiree company's stock and or buy the Calls and short the stock as a hedge. It's not a one for one transcation. There's some ratios of how much to buy based on the volatility of the underlying stocks, risk free interest rates, and some guessing.
Of course, every transaction is different.
The reason the aquiring companie's stock goes down is because usually the merged company does worse. Synergy? Hah! Another reason is that when companies start buying others is because their earning are or have decreased and they're trying to boost performance by buying others. So either way, buying other companies is usually a hint of troubles ahead or now.
Of course, everyone on Wall Street has their own opinions as there will be after my post.
And you're right about Wall Street: in a nutshell, whatever their title is on Wall Street, their job function is sales period! That means th investor get fucked somehow!
Saturday is April 1. Slashdot will be shut down. Sorry for the inconvenience.
Many people only donate money to registered charities. Why? Because there are legal restrictions on how the charity operates. I could donate money to some idiot at my door claiming to run a charity, but without a registration number, he can go sit on the curb for all I care.
This isn't Google being evil, its you not willing to file paperwork.
- Michael T. Babcock (Yes, I blog)
'Caveat Emptor'
They said from the beginning that they wouldn't provide typical forecasts.
Nobody forced anyone to buy their stock.
Predictably the stock is less stable, and will presumeably (according to simple capitalism) be valued slightly lower because Wall Street prefers stability.
Done.
Carping about "oh they should do this" or "should do that" is stupid. You bought it, you don't like the conditions or the company, you sell it. If you have lost value, well, you've just been bitchslapped by 'the invisible hand' (plus your own unrealistic expectations).
-Styopa
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.
Boo-f*cking-hoo.
/you/ are doing some non-profit work. And how much support would be enough?
/anyone/. Just the fact that they /are/ helping people or organizations is laudable. And were I Google, I'd set a few requirements for people to receive my free and most welcome aid, otherwise I'd be helping everyone with everything, and I'd have to provide 24/7 call support as well as an added bonus.
Even though I assume that you do a great job on that website, what obliges anybody in the world to help you out based on the fact that you do non-profit work? You might just as well oblige me, or any other slashdot geek to support your cause one way or the other, just because
Google has no obligation whatsoever to help
"They give, but won't give to me" makes them evil? They are not required to give to anybody. The fact that they give at all is fairly noble, imo.
Wall St. doesn't like it, too bad. It's about time someone stood up for long term value in this country and pulled their head out of that quarterly numbers mind fuck that's all to common. I'm glad to see Google taking the lead.
Stay out of that line. Focus on value. The share price is grossly inflated right now anyway. It'll go up, it'll go down. You pays your money and takes your chances.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
We are not an incorpoated 501(c)3 NPO
There's your problem - right there. I also only donate to registered charities, and it's not for the tax deduction it's for the accountability.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
But I do wonder whether it is wise to base business transactions on "higher principles." I mean, when you hire a plumber, do you really want to discuss his personal views on the value of good pipes to society and so on?
Coca-Cola, Gillete, the Washington Post, McDonalds, and Berkshire Hathaway are just some of the companies that do not provide quarterly earnings guidance. In addition the CEO of the U.S. Chamber of Commerce recently called on businesses to end the practice in favor of better communication about long-term issues. The only reason Google seems to be singled out on this issue is because it's Slashdot.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
*beep*, wrong.
That's why you (and many other) people buy stocks.
Some people buy them for philisophical reasons (think ethical funds). They hope their money goes up, but if it turns out they just invested in 'good' companies, they're happy (think charity with potential profits).
Some people buy the shares simply to own a piece of history (many did, I'm sure, in Google's case). This is why Tim Horton's in Canada went partly public (to make money, but because people would want to own shares, whether it earned them money or not).
Some people buy shares to get the dividends on a long-term basis, whether the share price goes up or down.
Don't assume everyone buys shares for the same reaons.
Larry was very clear -- buy Google shares because you want to give us cash to keep doing what we've always done.
- Michael T. Babcock (Yes, I blog)
1) Confining their philanthropy program to accredited non-profits instead of just giving free advertising to anyone claiming to be a charity seems entirely reasonable to me.
2) A tax deductible donation is hardly cost free. Surely, as such an ardent philanthropist, you've noticed this on your own taxes.
3) As someone else has pointed out, even in the worst light, not giving you free advertising doesn't remotely constitute "evil". Helping the Chinese government suppress information about Tibet does.
What I'm listening to now on Pandora...
I fully support Google's stance on this issue. Providing guidance is just an invitation to cook the books. What they are asking is to forecast how much money the company is going to make or lose in the next quarter/year. And *then* they are asking the same company to report how close they came to the mark. If the estimate was wrong, the shareholders may have reason to launch a lawsuit.
So what happens? The company does it's best to juggle the numbers so that they match the estimate. This is one of the reasons that accounting practices are as bad as they are -- there is a huge amount of incentive to mislead.
But not only this conflict of interest, what does a company do if they have inside information that will affect their profits in the next quarter? They can't announce the information *and* they can't give accurate numbers (because they can't justify them). So if you are planning a big cash purchase and you know that earnings are going to be low because of it, you are stuck -- you either mislead the analysists or you give them a hint that something big is coming down the pipe. Both are really bad.
But having listened to a number of analyst meetings, I am constantly shocked how clueless these analysts are. They aren't even aware of basic public information that is published in the newspaper. One company I worked for won a large lawsuit (several million dollars) from the federal government a month before the quartly results were released. It was big news in all the papers. At the analyst meeting for the results, the analyst from Merill Lynch asked where the money came from. "The government lawsuit" was the reply. "What government lawsuit?".
I think you're absolutely right. Google's way of doing things is completely unacceptable! They are obviously going to plunge their company into a financial morass of .... hold on, GOOG just dropped to my strike price. I need to go make a major purchase!
Later, suckers!
Why should I argue rationally with someone being irrational? I'll just mock them instead.
Well, why are human beings ethical agents?
In a nutshell, I think it's because they have a concept of themselves as agents, as distinct individuals acting in space and time. We are the stories we tell about ourselves.
Now, if your brand of ethics is based on an idea of benevolence, you might think it is ethical to decide for those people, based on the most superficial observations, what is good for them to do or not to do. On the other hand, to my way of thinking, this is intruding on a story that does not belong to you, and harms (what I see as) the person. One might take such an action with an offspring, or an unusually close friend, but it extremely presumptuous otherwise.
As a rule of thumb it's more ethical to my way of thinking to let people make their own decisions, even if they are mistakes. The first dealer to my mind is being an interfering busybody. How does he know that you don't have a medical condition that doesn't allow you to exercise? Or that you don't need the car for a job? The second dealer is more ethical to my way of thinking, although he may violate certain social norms. He's probably thinking, "it's none of my business whether this guy buys a car or rides a bike." Which I would say counts as "having an ethical thought".
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Don't be stupid.
I think this obsession with quarters is hurting the businesses that the stock market is supposed to be helping. I've seen several instances where a stock posts very impressive per share profits, in down times even, fall a few cents short of average analyst estimates and boom, the share price drops.
All of what you said has ZIP to do with Google. Whether Wall Street likes it or not, they can't do anything about Google's stance.
Shareholders can whine and complain if they want. They're still going to be presented with three options:
1. Sell
2. Don't sell
3. Buy more
(Of course, they could short/put it to offset their losses, but that's beside the point.)
Traditionally, shareholders have weilded a lot of power over a company, because a drop in price significantly inhibits a company's ability to raise capital. The problem here is that Google doesn't need to raise capital. Let me repeat that, Google doesn't need to raise capital. Until a time arrives that they do need to raise capital, Google can continue to ignore the demands of analysts and shareholders alike. (Save for the preferred shareholders, that is, who are directing the company.)
Javascript + Nintendo DSi = DSiCade
One good example of analysts being wrong is when you look at Costco vs Walmart.
Walmart has a high turnover rate, low customer satisfaction, and questionable business practices. Wall St. analysts constantly praise Walmart despite the fact their stock has been on the decline.
Costco pays its employees very well, allows their workers to unionize, and tries to be socially conscionable. Analysts lament Costco's business practices and yet their stock has been steadily rising.
Seems like some analysts are more into pushing political theory rather than what is profitable (and sane).
The absurd naivity is on your part, not GPs.
You think that because this is the way everyone else does it, then Google HAS to do it that way too. If they refuse, you sputter and spit and insist "But...but...but... you HAVE too....!!!!"
No, they don't. If you don't like it, don't buy their stock. If the analysts don't like it, they can issue "sell" recomendations or decline to issue a "buy" recommendation. But the fact that analysts want information to make their decisions on doesn't ethically or leagally compell Google to offer it. The fact that some people chose to buy Google stock doesn't ethically compel Google to act in a manner that those shareholders find proper. If those same stockholders feel that Google is going to lose money or market value, they'll abandon Google in a heartbeat and recoup whatever portion of their investment they can get back. They certainly feel no obligation to stick with Google. Why, then, should Google feel any obligation to satisfy them? Google simply offers a chance for people to ride on their coat tails. That doesn't require them to offer a chance to decide where those coat tails are going.
(You might argue that this conflicts with certain laws, and you'd be right in some sense. The problem, however, isn't with my analysis. It's with the laws which interfere with the free market.)
"The legitimate powers of government extend only to such acts as are injurious to others." Thomas Jefferson.
There is no legal requirement for a public company to provide quarterly earnings guidance, and in fact a number of large, successful public companies do not provide such guidance. Google can easily meet their legal and fiduciary requirements without providing such guidance.
Contrary to what the analysts would have us believe, companies do have some rights in what and how they communicate to the public. (Because of Regulation FD, communication to investors and communication to the public are one and the same thing.)
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
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.
....short term profits mentality. They buy into the casino game, and when the rules are different-just slightly-and they KNEW that in advance-they claim foul?
Nope, it's their loot, they could have decided to go elsewhere in advance. This is sour grapes on steroids from the "greed is good" crowd.. Google was very careful upfront to say what they would or wouldn't do, just because they aren't acting like other corporations with short term profits mentality isn't Google's fault, it's Wallstreet's fault for thinking they would, based entirely on something they dragged out of their lardish butts, because it wasn't based on any actual data. I think it's funny really, because you could see those neurons all scrambling to throw money at google, they got completely coldcocked.
Google said that they actually didn't know what they would be doing in the future, just exploring wild new technology and see what might work and what might not. It is loosely based on advertising sales, and that's it. Google is an *exploring new tech* company. Every single exploration left turn or right turn is not guaranteed to make some investor money. If the investors didn't understand that going in, perhaps they should have taken their money and started their own business and done something useful and productive instead, ie "get a job".
Frankly, the entire idea of investing has just turned into wild ass speculation based on the really quick buck and frantic share turn arounds. They should pass a law requiring a minimum hold period on shares between trades anyway,like one or two years, not a few hours or days or weeks, to discourage short term profits casino mentality. Put the "invest" part back into "investing".
I have zero sympathy for the stockholders and analysts in this case who were looking for the quick easy buck. None. There are plenty of other enron-esque companies out there for them to choose from if that is what they are looking for. It's like the bulk of the stockmarket,so there should be enough there for them to check out. The few companies who DARE to try something quite different in a business model and to perhaps follow at least semi ethical guidelines are *quite rare enough* without the jackals and hyena scavengers braying at them.
"I'm glad you're not a stock broker or analyst" You must be one. Stock analyst work for themselves. The provide their "guesses" and then want the companies earnings to confirm their predictions. For some companies having their business decisions affected by people who have never run a business is important. It is good to see a company that has chosed not to play the game. The honesty in the IPO could have restrict the sale - it didn't. Google should continue along the path they have chosed. The analyst have made their money by now.
What are you talking about? You entirely miss the point of why companies issue equity. Now that Google is flush with cash, they could care less what the stock does. The price of the stock is now only relevant for taking over other companies (eg. AOL) and enriching the internal executives. If they don't pander to analysts, so much the better.
What analysts and investors think or project is not only meaningless but harmful. If they were good at running companies, they'd open their own Google.
Google is correct in not getting into the short term thinking game. Try checking Warren Buffet's negligent record in cowtowing to analyst's with Berkshire Hathaway and tell me his track record is poor.
Never go to sea with two chronometers; take one or three.
>Companies are now beholden ONLY to their owners
I fixed it for you. In case you've forgotten, the stockholders are the owners of the company.
Even if that weren't the case, *you* are not their customer. Your clicks are what they sell to their customers, advertising companies.
I don't know that google is taking the right approach, but I am 100% convinced that the traditional approach is wrong these days. The market is too focused on short term profits. It's like a male dog in the midst of hundreds of female dogs in heat. It forgets about everything but, "I want some! Right now!" and it'll starve to death in its lust-- and kill anything that tries to get in its way in the meantime.
If we had reasonable analysts in a reasonable system giving reasonable LONG TERM analysis, the old system would work. But the rules have changed, and the old system is driving itself to destruction under the new rules.
Until someone comes up with a reasonable approach, and the shareholders start acting responsibly for the long term, I think Google's protest is an effective way to go.
Meanwhile, I'm starting to look at the average street analyst the way I do at the average lawyer who goes sniffing around for PC lawsuit material.
Google's position is that it doesn't want people gambling off of their stock. Google has thumbed its nose at the short term speculative market that tries to ride the temporary highs and lows of a stock. Google's position is that it is going to happily give long term forecasts and describe the health of the company, but it isn't going to do it in such a manner that people can speculate form quarter to quarter. They have no intention of setting and meeting quartly goals. They have stated that their goals are not quarterly and so will not be held to quarterly milestones.
In many ways, this is a GOOD thing for the health of a company. As anyone who has been apart of a publicly traded corporation knows, you are tied into the quarterly system. When you can buy supplies, capital equipment, and sell product is entirely based upon the quarterly system. There has been more then one instance where I was prevented from moving forward with a project because they didn't want to spend the money that quarter. They happily let me spend to my hearts content the day after the quarter ended though. That is NOT a healthy attitude for a company to have, but it is the attitude you NEED when your stock price is tied to quarterly reports.
Personally, I think that there is a lot of merit in what Google is trying, especially if it results in a company that is significantly more capable of long term planning. It might not work for some companies, but it might very well work for Google. Cutting themselves free from the quarterly mentality might very well give them the edge set much longer term plans and goal then their competition can.
A week or so ago I posted hereabouts that it seemed like the analysts on Wall Street were intentionally punishing Google because it wasn't playing ball by giving inside information to analysts for their "projections". I thought it funny that so many news items started to crop up denigrating Google and its projects. Everywhere, even on DL.TV, there was widespread Google-bashing, or at least reporting that people were bashing Google. The stock price keeps plummeting. I speculated that analysts were at least refusing to lend a hand to stop the flood of bad news by speaking up about the company's strengths. Not attacks, just refusal to aid. I thought perhaps that they were passive-agressively sending a message to let them in. They are accustomed to the inside information. They need it to make money on the market consistently, something that normal cowpokes trading online don't do, lacking the information that the analysts hold so closely to themselves.
Damned if the attack hasn't gone full-agressive and public. The message is clear: give us the information we want, or we will do our best to ruin Google. This is extortion.
The analysts need to be regulated again. This is completely out of control.
Companies are now beholden ONLY to stockholders.
Not necessarily.
At least one company puts the stockholders LAST in the priority list.
Mit der Dummheit kämpfen Götter selbst vergebens.
I run a non-profit organization that is entirely web-based. [...] We are not an incorpoated 501(c)3 NPO.
You have GOT to be kidding me. You expect a company to donate cash or services to your organization, without proving to them that you follow the law regarding non profit organizations?
I could not donate to an organization that espouses even the purest of motives if that organization can't get its act together and file as a real non-profit, accountable to the law. I might as well be giving money to a con artist.
There are a vast pool of eligible non-profit organizations that ask for Google's money. By only donating to 501(c)3 organizations, Google is protecting itself and has a better chance that the money/services will not be ill-used. The tax-free status of donations is intended to encourage giving, so both Google and the organizations they donate to get something out of the transaction. Were you an eligible 501(c)3 organization, you would hardly call it slimy - you would hail it as a progressive tax code.
In giving money to non-profits, a company MUST look at the return on investment. If giving $1,000 worth of advertising to you helps 100 people, that's nice. If there's another organization that will help 500 people with that $1,000 investment, then that's better. You also need to look at whether the non-profit's goals are similar to your own. It could simply be that Google doesn't donate to any organizations regarding reproduction simply because they want to remain neutral. They don't have to publicize their policy, nor do they need to explain themselves. You are asking for money, and then suddenly you claim that you deserve it and they are such pigs for not donating to you? What rights, exactly, do you have to their money again?
As far as your implication that donations of advertising are "free" and move moeny from one pocket in google to the tax free pocket, consider what you are asking. You are asking Google to give away free advertising to any organization that claims to be non-profit. If google does that, they will have more "free" ads shown than paying ads. Suddenly it won't matter what tax break they get - they won't have money in the first pocket to move to the other pocket. They have to set a limit (for financial and legal reasons) on the amount of "free" advertising they can donate to true non-profit organizations. That limit, I imagine, is reached and therefore they don't have money left over to give to organizations that merely claim non-profit status without actually being non-profit. This is merely one of the consequences of what you are asking them to do - it's much more far-reaching and complex than this, of course.
If I were Google, I'd be wondering, "Is this an advertisement for Plan B? Should I be supporting an organization that claims to be non-profit, but will not take the legal steps necessary to demonstrate that commitment?" Actually, I'd probably not even get that far. "Oh, somone else wants money ear-marked for non-profits, but isn't a non-profit. Time for the round file."
-Adam
No one forced the stockholders to become owners. Indeed, owners that only own fora short time shouldn't have any real voice at all anyway. The short term thinkings are the ones that would destroy the company.
A real owner would be concerned about the viablity of the company, not quarterly gains. Every one of the 'owners' of google knew what they were buying into before hand. If they didn't like it, they shouldn't have bought.
Without going too math heavy, there is a reason Wall Street hates volatility. While its true that 15 years ago, Wall Street made money from brokerage commissions, the main money maker is now asset management fees, etc... It used to be a fortune to do a trade on the street, now its $19.95 (or $7 with some deep discount brokerages).... that's not where the money is.
If they manage an account and collect 1% as a fee, then the larger that account gets, they better they do. Now they could outperform the market to make extra money, but with only 1%, that's too much work. Market growth is the easiest way to grow.
Also, there are two ways to grow a companies's stock (assuming you believe that earnings matter in the long run), increase the underlying company's earnings (but that's work), or increase the P/E ratio (or FCF, or whatever ratio you like).
The assumption is that the price of the stock today is the NPV of all future cash flows (or dividends, which is theoretically the same but a harder model in the real world)...
So to increase the value of the stock, you can increase future cash flows (work), or decrease the discount factor...
Well, since most models of stock valuation demonstrate that Beta is a decent indicator of the "risk premium" (basically, discount factor = risk free rate (treasury bills) + Beta * (market premium)), so if we want to decrease the discount factor, we can decrease the rate of the treasury bill (out of our control), decrease the market premium, (out of our control), or decrease the Beta.
If Wall Street convinces Google to disclose more which reduces volitility (an interesting assumption, but let's pretend), then Beta goes down, discount factor goes down, and Google's stock price goes up...
With Magic, we've created value, our asset holding fees go up, we get a huge bonus, and most importantly, nobody had to do any ACTUALY work (like increase earnings) to get it done!
Alex
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.
[Fuck Beta]
o0t!
Google doesn't want to give guidance because it forces them to become short term focused to satisfy expectations they set for Wall Street. This is the bane of existence for many publicly traded companies. They give guidance and if they don't hit their numbers, they are punished by the analysts. It makes the analyst's job easier in that they can then put more pressure on the company (Google) and site them for the failure.
The problem is that once a company becomes short-term focused they are beholding to hitting numbers and making bad business decisions simply to hit those numbers. This short-term focus trickles down from the CEO to all decision managers in the company who are given stock options. The company can no longer take long-term gambles because Wall Street will punish them for missing or not increasing their short-term outlooks. The decision makers will feel a real financial loss for not hitting those numbers and therefore reinforce short-term decision making.
Conversly, long-term focus is the advantage of a privately held corporation. A private corporate can make long-term decisions that cost millions of dollars in hopes that it will pay 3, 5, 20 or even 20 years down the line. A short-term company can not make such decisions and therefore must focus on short-term growth or growth through acquisition (i.e. buying the competition to increase short-term revenue). A private company can not raise cheap capital to make these long term investments like a public company. Google wants the best of both worlds, they want to use cheap capital (i.e. stock sales) and use the money to make long-term investments.
Stocks grow faster than real estate, but with more volitility, and depending on your views of CAPM, that explains it or doesn't...
.5% over inflation
That said, when you buy real estate, going 500% long (putting 20% down) is EXTREMELY conservative, and 1000% long is extremely common, even in business settings.
In the stock market, you can at MOST go 200% long.
In addition, the cost of capital (borrowing the money) is MUCH higher for stocks... You might be paying 7% or 8% of Margin Interest, vs. 6.5% on mortgage interest.
Basically, the stock market DOES outperform real estate significantly... but it doesn't...
In the long run, the "risk-free rate" is something like 4.5% with inflation of 3% (there are the gold standard years or 0%, plus hyper inflation, but whatever)...
Long run rates:
Inflation: 3%
Risk Free: 1.5% over inflation
Real Estate:
Stock Market: 8% over inflation (depending on time periods viewed of course)
So while the stock market looks good...
$1 invested in the stock market makes 8 cents in year 1 after inflation, or 11 cents if we went 200% long and paid our margin rate...
$1 invested in real estate BOUGHT $10 of real estate, each of which grow by 3.5% before inflation, so we made 35 cents, lost 3 of them to inflation, and ended up 32 cents, so we made a 32% return. This requires ONE HUGE assumption, we were able to collect in rent enough from the real estate to cover the "holding costs" taxes + interest. If we don't, our return goes WAY down.
Real Estate does out perform the stock market, because it is lower risk and people give you money at lower rates...
Alex
A Long, Long Time Ago, In A More Moral Age . . ..
..
Investing was about taking money that you have, and using it to help someone else do something you thought needed to be done. Usually, if they proved successful, this meant that the value of the effort you supported grew, and you could sell the portion of that business which you owned if you so chose.
Oh, and if the endeavor was wildly successful, there would enough of a surplus of money you could get paid without losing any of your interest in the endeavor!
Today's investment system doesn't care what the company being invested in is trying to do, all that anyone cares about is whether the stock will A) pay dividends which can be used as income (and this portion of the marketplace appears to be dwindling) or B) grow in value so quickly that you can sell your interest in a matter of days or weeks and make a profit.
Investing used to be about creating products, services, business and livelihoods. Now it is about sucking everything out of a company you can, and moving on to the next company.
Google said (my interpretation) that they want to cater to the original idea of what investing is about.
The guys who drive the current version of investing are trying to force Google into the paradigm by which the analysts even exist in the first place . .
What I don't understand is why any of this surprises anyone who's paying even the least bit of attention.
Google is overvalued because the have no product. They only have a service. There is some college kid right now working on a technology that will put Google to shame.
Hate to break it to you but service-based business is nothing new nor will it go away.
There was search long before Google, there will be search long after Google and it seems Google is making the mistake that most tech companies make when they hit it big. They assume that nothing will change and they will continue to make money.
This is the company that introduces a couple of new services a year.
There is no security in service companies, if liquidated, Google would have but a tiny fraction of its worth in assets.
The same goes for just about company, considering the huge costs involved in liquidating real estate, machinery, etc. Staring at the assets is a fool's way of valuing a company. If anything, they can be a liability.
Information may be money in this day and age but our economy is based on material production. This whole web thing will eventually be replaced by something else, just as all technologies are and when it is, Google will realize it is fucked.
"I think this Interweb thingy is just a fad."
Brilliant, fucking brilliant. Don't quit your day job. Unless your day job is really being a trader, in which case please please please please quit your day job.
Companies look to the last and the next three months, no further.
Exactly, because that is what the owners want (by way of shareholder voting, boards, etc.). If the owner of a private company wants to look into the long term, fine. If the stockholders (read: owners) want to look for long term gains, great, and that's the direction the company should be pointed in.
Customers everywhere scratch their heads and wonder why customer service on nearly every level for nearly every industry is absolutely abysmal
And for the answer, they should look into the mirror. Customer service is performed when it presents an advantage to a company. Customer service is not free. It requires people, resources and training. If customers were willing to pay more for service, then more companies would provide it. But fact of the matter is, most people buy based on price.
Car sales are probably the best example. How many people buy the car from the dealer that gives them the best price rather than the best service? I paid a few hundred dollars more to buy my last vehicle from another dealer because they provided better service and I could trust them. If you aren't willing to pay more for better service, then you shouldn't expect better service.
We all know that media companies and their obsession with DRM is leading to a dangerous and eventually (in the HDTV realm anyway) huge conflict with their customers.
Then don't buy from those companies. Make sure your friends don't buy from those companies. But don't give a business money, then turn around and say, "but you aren't giving me what I want."
-dave
/., where "Apple and Google provide Iran with nukes" will be refuted with "But Microsoft is a convicted monopolist"
Curious, that. Of all the people associated with a company, the stockholders are the least likely to have invested anything into the company that it can use for the long term. The money is useful for market capitalization, but any sane company knows, or should know, that depending on your share price for financial clout is idiocy.
A stockholder owns a small piece of a company. A piece of paper. They don't do the work that makes the company go, they don't make decisions that make the company go, and they don't have to buy the product. So why is this piece of paper so damn important?
Also, if you'd read TFA, you'd know it wasn't a stockholder puling and whining about this -- it was an analyst. Someone whose real stake in the company's long-term prospects is even smaller, and whose contribution to a company's success or failure is even less important. Also, after the last several years of corporate accounting/stock scandals, analysts belong to a class of society whose credibility is severely strained.
thats the trailing PE. The forward PE is 28.96.
Besides, the growth rate was 80%, and the PE multiple should be (about) what the growth rate is.
IT looks positively cheap to me. I think that people see a multi-hundred dollar price per share, and panic.
I guess that BRK.A would be completely overpriced then.
... hi bingo
The window at which highlevel executives can sell shares is extremely small, and pre-regulated in advance. Those guys cant just call a broker and sell on a dime (unless they want to spend some time with Martha in the slammer) but they have to pre register their intent with the SEC. believe me - if there was any chance that Sergey knew or could foresee the dip at the time he registered his sale, he'd be in the Menlo Park PD in handcuffs right now. 'cause if anything - that is what the damn anal-ysts would love to see the most!
Ok, we have a major disconnect here.
Companies are under no obligation to provide "guidance" on future earnings or growth of the company. A company is obligied to publish its 10K and 10Q forms as well as other required SEC filings. These documents - for those willing to do the work - provide more than enough to analyze a company and its business.
In fact, the "guidance" you and the analysts are demanding has been the source of untold harm. Remember, it was Enron working to ensure that it hit its earning's guidance and estimates that led to the fruad to keep the numbers on track. It is trying to keep earnings estimates on track that leads many a company to dump staff to "cut costs", rather than accept "lumpy earnings".
It should be noted that there are other companies that refuse to provide guidance. Companies like Berkshire Hathaway (i.e. Warren Buffett's company). What the analysts don't like is that they aren't in control here. That in analyzing Google they might actually have to do some work.
Like many of those at the Motley Fool, I applaud those who refuse to give into the demands of the analysts and give earnings guidance. Of course, this could be a case of trying to "get even" with Google. Remember, they were the folks that selected the "Dutch Auction" for their IPO and had to deal with the investment bankers and analysts who were upset that at market rather than their experts got to set the price for Google shares.
Yours,
Jordan
If you don't like how Google is doing business, don't buy Google. Google fully discloses their corp. philospohy in their prospectus. If you are an analyst, you don't matter because despite what you say they are profitable.
Investing in a profitable company? Horrors, we can't have that. Gives all the crap analysts and brokerage houses are pushing a bad reputation! You need to buy the blue sky buzz word of the month pump-and-dump being touted on TV. Not some innovative company with large sales and a good product line!
I wonder. Google has pissed off DOJ and Wallstreet. It isn't the first time the Wallstreet crowd or the Bushites have played dirty.
In addition, there is a tradition in business of demanding conformity. If you stand out in a corporate culture you are either pecked into conformity or eventually fired for trumped up reasons. Very much like high school in some ways.
It will be interesting to see what happens. As long as they are profitable they do not have to change. Can they last long enough to change Wallstreet? Or are they doomed to cave in?
putting the 'B' in LGBTQ+
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.
"We are all geniuses when we dream"
- E.M. Cioran
This is basically an argument against companies going public, isn't it? Unless the government instituted minimum times to hold stock before you can sell it again, which they aren't going to do, there's no way to stop traders from descending on a stock, voting to pump as much perceived value into it in a short period as possible, and then ditching. As long as you allow publicly traded ownership in a company, the result is going to be an attention to the short term rather than long term.
Slashdot needs a "-1, Wrong" moderation option.
The Urban Hippie
Well, that, or they can get sued by irate shareholders, for not keeping their interests first in their plans. It's happened before, and it will definitely happen again (although not necessarily to Google).
Slashdot needs a "-1, Wrong" moderation option.
The Urban Hippie
Nonsense. It's a common misconception that public companies are required to maximize share vaule. This is not the case. A public company is legally obligated only to abide by their prospectus and charter. Which Google does.
Hey, I finally got my first freak! Took you long enough!
Damn!
When is someone going to hand ZONK a clue stick? Doesnt it bother anyone at slashdot that he is single-handedly making the site look like a mouthpiece for paid shills?
No wonder his 'articles' get the lowest repsonses. Most people are probably blocking his 'submissions' by now.
But that's my point. When customers do this, then a situation develops where there isn't anything the shareholders can do to get their money out of the company other than selling off the pieces and shutting things down.
So you want to baby everybody? If someone (or in this case, a large group of shareholders) makes bad decisions, he or she (or they) have to face the consequences. Basically it because a game of musical chairs. Somebody gets caught losing money eventually (maybe even a large pyramid scheme). But it's based on the decisions they made. I don't think we let people fail enough, so they never learn. If you live in a flood zone and don't have flood insurance, well, in the words of Bill, "Here's your sign." If you vote for short term gains and get caught losing money, well, maybe you've learned something and you'll change.
And personally, I don't think Ford's problem isn't that they aren't serving their customers (according to Edmunds, for 2003 Ford had the following cars on the top ten best sellers: F-Series, Explorer, Taurus). Their problem is that they are reselling the same car to the same buyer and not bringing in new buyers. What they need to do is to get more people to test-drive their cars.
And lumping analysts in with short-term stockholders is a bad idea. It really depends on who is the analysts customer (yes, they are in fact serving a customer). My mother managed mutual funds for large investors, investors who bought funds and planned on keeping them for decades. Her analysts were to give her the data to determine good long term investments, but in order to make money, you don't forego a good short term investment.
-dave
/., where "Apple and Google provide Iran with nukes" will be refuted with "But Microsoft is a convicted monopolist"
While guidance may give you a little bit of insight into a company, without any context, that information is worse than useless. Stock "analysts" demand guidance because it gives them a way to generate income for their second jobs as talking-heads for CNBC, CNN/Money, and all the other business talk shows out there. Guidance is nothing more than a guess dressed up in corporate-speak and marketing glitz. And in the long-term, guidance is a lose-lose-lose proposition for a public company.
- An accurate guess' only affect is to move the price drop (or increase) to the day they issue the guidance and away from the day they announce the actual results.
- If the guess is inaccurate on the high-side your stock will still plummet when you fail to "meet expectations", and you'll probably get sued by the short-term-gains monkeys who are pissed you didn't give them the profit you "promised" in the guidance.
- If the guess is low, (or, when you intentionally "Guess low,") you will see higher stock prices at end of quarter because they "exceeded expectations." For a while, anyway... But if you do this consistently, analysts will simply label you as "sandbaggers" and hold you to a higher goal than your guidance, and punish you accordingly when you don't meet THEIR expectations which are above and beyond your "sandbagged" guidance.
Look at these three scenarios: They are lose-lose-lose for the corporation, which all lead to the company losing some percentage of its share value. Of course, since the company loses, that means the shareholders are all losing too... Wasn't that who you were "protecting" with guidance in the first place?
Who did what now?
Honestly, why the hell haven't you filled out the forms to become an official 501(c)3 NPO? Yes, it's time consuming and requires much more management, not to mention the probable initial outlay of funds to a lawyer in order to get your 501(c)3 application completed properly. The only reason that I can see for you not to go through the process is that you are either 1) lazy or 2) not very committed to your cause, since you seem unwilling to make the necessary changes to your business in order to achieve NPO status.
In another life, I was a founding member of a 501(c)3 corporation. Yes, it's a PITA to run things in the manner necessary to maintain your status, but it's necessary. The reality is, and keep in mind that this is born from experience gained while attempting to garner some minor intial donations to fund our application, the only way to actually be treated like an NPO is to be able to prove that you're an NPO. Otherwise, why should any corporation or private entity believe your word that you will not take their money and run when there are no legal restrictions to keep you from doing so. I happened to us on a few occasions, but we never got angry and claimed the company was evil on public message boards. Instead, we simply moved on until we achieved the necessary funds to receive our NPO status. After that, the companies that turned us down before had no problems donating to our cause.
A not for profit company without 501(c)3 status asking for donations is akin to a bum on the street asking for money for food. Sure, he might be telling the truth, but how do you really know that he's not going to waste the money on crack?
For the record I forwent modding your post down in order to post in this conversation in the hopes that you might realize the ridiculous nature of your comments.
Besides, I'm sure somebody else will mod it down anyway.
If Murphy's Law can go wrong, it will.