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Why should Larry Page (a billionaire many times over) have to answer the questions of some loser $100K analysts? I commend Google for not estimating their earni

by rudiger 16y ago

Why should Larry Page (a billionaire many times over) have to answer the questions of some loser $100K analysts? I commend Google for not estimating their earnings, offering "guidance", or any of the other bullshit that these analysts need to justify their useless jobs.

projectileboy 16y ago
I'd like to upvote you twice. Warren Buffett has plenty to say about the unholy marriage of corporations and their analysts, consummated with garbage "earnings guidance". Yecch. The quality of the article was lame, at best: "News Flash: Wall Street analysts say people should really pay attention to them, or else."
meterplech 16y ago
This criticism seems unnecessarily harsh and focused on income. There are real issues here regarding the role of a CEO in working with or talking to analysts and investors. You could make an argument that it serves Google's long-term interest to withhold this information from analysts and their shareholders. Or you could argue that Larry Page should answer to people who own part of his company. I'm not saying one is more right than the other, you just aren't contributing to the discussion by trashing someone based on their income. This isn't about Larry Page vs some "loser $100k analysts" it's about the CEO of a major public tech company and their relationship with their investors.
- loganfrederick 16y ago
  I had to upvote and add to this comment to emphasize your point. I haven't looked through Google's SEC filings for what Larry's actual comments are, but he does need to remember that it's not "his" company anymore and he is partially a billionaire because Google went public (in exchange for getting public money and boosting the value of his own net worth, Google has been able to use that public funding for its continued growth). He likely would've been rich had Google not gone public, but it did and it'd be hard to argue against the positive boost it has given him. He may not owe it to public investors to give bullshit earnings guidance, but he does owe it to them to answer their questions on how he intends on managing the company and transitively the investor's money.
  - rudiger 16y ago
    The major shareholders of Google remain inside Google, especially when you consider voting shares.
    - asanwal 16y ago
      Sorry but 81% of Google is owned by mutual funds & institutions. 1% is held by insiders http://finance.yahoo.com/q/mh?s=GOOG+Major+Holders http://finance.yahoo.com/q/mh?s=GOOG+Major+Holders This also underscores the fact that this is not Page's company and so while the Street's short-term thinking shouldn't influence him, he should provide shareholders a cogent articulation of his plan/vision.
      - theoneill 16y ago
        Google has two classes of stock.
        asanwal 16y ago
        That's fine. But let's assume all 81% of institutions hold "less privileged" (likely non-voting) stock, it doesn't matter if they can't vote. They can vote with their checkbooks (allocate investments to other stocks) and that is bad for Google's stock price.
        JanezStupar 16y ago
        Your comment reminds me of how people set out a company to you know build a legacy, make some money, change the world, whatever. But then this MBA financials guy comes around and shows how with some book engineering you can get 5% more out of your company each year (by cutting costs for example) - and you agree with him. A year later you got 7% out and the company still stands. And then one says, this is good - lets keep doing this, final result - the company is gone 5years from now. I'm not saying that cutting costs, trying to not pay the taxes and massage of investors is stupid and worthless. What I'm trying to say is that Entrepreneurs start out to build companies that do stuff. But sometimes they just get so much into intricacies of "little stuff that matters" that they forget the big picture. So for each action (or at least each major action) an executive should ask himself, how does this make this company better at being a company that does stuff people want. And cliche answer - it will help it because shareholders will get more out of it in short term is one of the worst. So can you please explain to me how lower stock price affects google's ability to do what it does?
sunchild 16y ago
Also, there is a long, demonstrable history of Wall Street analysts being flat-out liars. They've been caught pumping garbage that their own firms bet against so many times, one wonders why anyone listens to them at all. Larry Page knows what he's doing. Wall Street is the only giant sucking sound.
redthrowaway 16y ago
How about because that 8% drop in stock price just collectively cost his thousands of employees a significant chunk of money? Larry may not care about the stock prices, but the people who work for him, for whom stock options are a major incentive, certainly do.
- joezydeco 16y ago
  Hopefully those people are also in it for the long term and know that an 8% drop will mean nothing if the earnings and profit grow year-to-year.

by rudiger 16y ago

projectileboy 16y ago

I'd like to upvote you twice. Warren Buffett has plenty to say about the unholy marriage of corporations and their analysts, consummated with garbage "earnings guidance". Yecch. The quality of the article was lame, at best: "News Flash: Wall Street analysts say people should really pay attention to them, or else."

meterplech 16y ago

This criticism seems unnecessarily harsh and focused on income. There are real issues here regarding the role of a CEO in working with or talking to analysts and investors. You could make an argument that it serves Google's long-term interest to withhold this information from analysts and their shareholders. Or you could argue that Larry Page should answer to people who own part of his company. I'm not saying one is more right than the other, you just aren't contributing to the discussion by trashing someone based on their income. This isn't about Larry Page vs some "loser $100k analysts" it's about the CEO of a major public tech company and their relationship with their investors.

loganfrederick 16y ago
I had to upvote and add to this comment to emphasize your point. I haven't looked through Google's SEC filings for what Larry's actual comments are, but he does need to remember that it's not "his" company anymore and he is partially a billionaire because Google went public (in exchange for getting public money and boosting the value of his own net worth, Google has been able to use that public funding for its continued growth). He likely would've been rich had Google not gone public, but it did and it'd be hard to argue against the positive boost it has given him. He may not owe it to public investors to give bullshit earnings guidance, but he does owe it to them to answer their questions on how he intends on managing the company and transitively the investor's money.
- rudiger 16y ago
  The major shareholders of Google remain inside Google, especially when you consider voting shares.
  - asanwal 16y ago
    Sorry but 81% of Google is owned by mutual funds & institutions. 1% is held by insiders http://finance.yahoo.com/q/mh?s=GOOG+Major+Holders http://finance.yahoo.com/q/mh?s=GOOG+Major+Holders This also underscores the fact that this is not Page's company and so while the Street's short-term thinking shouldn't influence him, he should provide shareholders a cogent articulation of his plan/vision.
    - theoneill 16y ago
      Google has two classes of stock.
      - asanwal 16y ago
        That's fine. But let's assume all 81% of institutions hold "less privileged" (likely non-voting) stock, it doesn't matter if they can't vote. They can vote with their checkbooks (allocate investments to other stocks) and that is bad for Google's stock price.
        JanezStupar 16y ago
        Your comment reminds me of how people set out a company to you know build a legacy, make some money, change the world, whatever. But then this MBA financials guy comes around and shows how with some book engineering you can get 5% more out of your company each year (by cutting costs for example) - and you agree with him. A year later you got 7% out and the company still stands. And then one says, this is good - lets keep doing this, final result - the company is gone 5years from now. I'm not saying that cutting costs, trying to not pay the taxes and massage of investors is stupid and worthless. What I'm trying to say is that Entrepreneurs start out to build companies that do stuff. But sometimes they just get so much into intricacies of "little stuff that matters" that they forget the big picture. So for each action (or at least each major action) an executive should ask himself, how does this make this company better at being a company that does stuff people want. And cliche answer - it will help it because shareholders will get more out of it in short term is one of the worst. So can you please explain to me how lower stock price affects google's ability to do what it does?

sunchild 16y ago

Also, there is a long, demonstrable history of Wall Street analysts being flat-out liars. They've been caught pumping garbage that their own firms bet against so many times, one wonders why anyone listens to them at all. Larry Page knows what he's doing. Wall Street is the only giant sucking sound.

redthrowaway 16y ago

How about because that 8% drop in stock price just collectively cost his thousands of employees a significant chunk of money? Larry may not care about the stock prices, but the people who work for him, for whom stock options are a major incentive, certainly do.

joezydeco 16y ago
Hopefully those people are also in it for the long term and know that an 8% drop will mean nothing if the earnings and profit grow year-to-year.