Michael Liedtke, the technology writer for the Associated Press, recently wrote an article discussing the effects of the unorthodox Google stock split designed to keep the majority voting control in the hands of founders Larry Page and Sergey Brin. The issue is that Google may have to pay out $500 million to shareholders of the non-voting stock because Page and Brin promised that the non-voting stock that its stock would trade within 1% of the voting stock. Because the non-voting shares lagged by almost 2% in the first year, Google may be on the hook for half a billion dollars in payments. All those criticism are fine and fair.
The problem with Liedtke’s analysis is this passage: “Yet many investors have become frustrated with Page’s unwavering belief that Google should be spending billions on far-flung projects ranging from driverless cars to diabetes-controlling contact lenses that may take years to pay … Read the rest of this article!