Saturday, November 06, 2004
Google Won't Ever Split?
Barry Randall, portfolio manager for U.S. Bancorp's First American Technology Fund, which owns 4,682 Google shares, says about Google, "This is a management that sees no upside to a stock split. I just don't think it's very high on the company's list of priorities." Mark Pincus, who runs Tribe Networks and was an early investor in Google, agrees: "If I had to wager, I would bet they won't ever split it."
This from The Seattle Times. The Times explains that splits, which have become so routine anytime any company approaches $100, is not in Google's plans for the same reason Warren Buffet avoids them: They inspire short-term speculators and make it hard to keep the stock stable. Some think Google is bound to drop without a split as the lock-ups expire.
However, Microsoft stock, which would be worth $8,441 a share if not for the nine splits which have left it at $29.31, might have benefited from an anti-split attitude. Microsoft, you may remember, used to be worth more, but dropped when the speculators left the market as the bubble burst. It seems like Google may want to avoid those kinds of investors altogether. Google doesn't have to worry as much, though. If its stock were worth as much as Microsoft's, it would still only cost about $1,200, which is a bit more reasonable, and certainly easier to stomach than Buffet's Berkshire Hathaway, which has a per-share price of $83,390.