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?
"I find your lack of faith disturbing"
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.
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.
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
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.
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.
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?
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.
Nonsense. Don't just throw meaningless "don't rock the boat" and "can't fight city hall" and "it was a fun ride, but" statements at Google based on hype and buzz, just because you can't understand how they succeed without conforming. No one ever did anything great by sticking to the "rules" that are propped up by people riding on the coattails of the last person who did something great. Your can't-do attitude is a self-fulfilling prophecy of self-doubt that has killed more dreams in the history of humanity than any real obstacle.
The next-quarter-result mentality comes from the top. It would require Google's management to cave to this Wall Street whining, which, as powerful as the "Wall Street community" thinks it is, doesn't mean squat to them. Larry Page and Sergey Brin own controlling stock in Google, and they're interested in long-term benefits (assuming they don't sell out). The only power the analysts have over them is a measure of influence on the most fickle of Google's investors, and any negativity resulting from that will blow over and balance out in a relatively short period of time. Google's got a good long-term plan, and if they stay the path there's no reason they can't prove you utterly wrong.
If you're not part of the solution, you're part of the precipitate.
....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.
>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.
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!
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