32% revenue growth… strong EPS. $13.5B in buyback during the quarter.
suspect other Google longs here.
I posted some thoughts here:
https://discussion.fool.com/2021-q4-35041599.aspx?result=NewPost…
tecmo
…
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GOOG up almost 8% after hours. Awesome revenue and profit growth. 20-1 split announced.
As many Internet stocks zoomed into the stratosphere, GOOG mostly remained good value and, recently, a bargain. Alphabet still makes most of its money from advertising. It’s a straightforward business, with Android and Google Cloud Platform as well-integrated complements. Berkshire should have scooped up GOOG as it did AAPL. I’m certainly glad I have, as many others here did, as well.
Puzzling
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Agree, outstanding quarter & good call tecmo. I am honestly not thrilled about the 20-1 stock split but will not be surprised to see it draw more attention and bids at $150 vs. $3K like Apple and Tesla did. If the market price pops, it will be interesting to see if Amazon might follow suit with a split.
Glad WEB will Never split the BRKA shares and avoids the added expense and book keeping that would come along with a split.
One unspoken reason companies split stock is, it allows them to grant RSU’s. Berky didn’t do RSU’s or options, and WEB’s shareholders are not you and me, but folks from his partnership days for whom he hosts a separate shareholder dinner.
The firm is run for their benefit, and we are just along for the ride.
One unspoken reason companies split stock is, it allows them to grant RSU’s.
I’m not following, why is that?
One unspoken reason companies split stock is, it allows them to grant RSU’s.
I’m not following, why is that?
RSU’s have multiple year vesting periods, and very high share price complicates vesting schedule, and in many tech companies, RSU’s are granted even to those who are starting.
For ex: at Amazon the highest salary is $165K at Seattle and $175 or $180 K at Bay area and there is no bonus. The rest of the compensation is awarded in shares. So if you have to award someone 10 shares (hypothetical) then when you have a vesting schedule of every 6 months for 3 or 4 years is very difficult.
Also, when the shares are vested some portion of the shares are sold to pay tax. Companies at least in theory wants to encourage ownership by employees. Now if you are awarding them one share, then the employee has to sell the shares to pay the tax and pocket the rest. There is no ownership.
RSU’s have multiple year vesting periods, and very high share price complicates vesting schedule, and in many tech companies, RSU’s are granted even to those who are starting.
For ex: at Amazon the highest salary is $165K at Seattle and $175 or $180 K at Bay area and there is no bonus. The rest of the compensation is awarded in shares. So if you have to award someone 10 shares (hypothetical) then when you have a vesting schedule of every 6 months for 3 or 4 years is very difficult.
Also, when the shares are vested some portion of the shares are sold to pay tax. Companies at least in theory wants to encourage ownership by employees. Now if you are awarding them one share, then the employee has to sell the shares to pay the tax and pocket the rest. There is no ownership.
My wife used to work at Amazon and now works for Google. At Amazon, the RSUs were backloaded, so you get most of your initial stock bonus in years 3 and 4. When the RSUs would vest, you’d get the option to sell to cover, or pay the tax yourself. We always elected to sell to cover, and get the remaining shares, which were fractional. So if the RSU grant was say, 10 shares, we’d get 7.2, or whatever it was.
At Google, the initial RSUs vest quarterly over the four year term. Again we’ve always elected to sell to cover, and got the remaining stock in fractional shares.
So I don’t see why the split makes any difference. At both companies the stock grants were presented as “On (date) you will receive Y number of stock, which is worth at today’s value of X number of dollars.”
And on the appointed date, they would fork over the agreed amount of stock minus the amount they sold to cover the taxes. The shares we’ve received has always been fractional.
So I don’t see why splits make any difference in regards to RSUs.
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For sure Amazon stock plan doesn’t grant fractional.
Here is an interesting fact…
Now youtube ad revenue is higher than Netflix revenue. Youtube makes as much revenue as Netflix without spending a dime on creating any content.
4Q NFLX revenue: $7.7 B
4Q Youtube ad revenue: $8.6 B
Separately Google cloud is growing at 45%.
For sure Amazon stock plan doesn’t grant fractional.
100% guarantee if you ask to sell to cover you get fractional shares. Going to the mat on this one, that is absolutely what happens.
Now youtube ad revenue is higher than Netflix revenue. Youtube makes as much revenue as Netflix without spending a dime on creating any content.
They do spend a tad more than a dime to police the content, no? (appropriate content, copyrights, etc.)
Mike
Google and Facebook…the two most dominant businesses old dealraker has seen. Been chanting buy-buy-buy (LOL) for years here. Google in particular is the one business I’ll criticize the Berk boys for not buying.
Facebook is super for business/group communications and for selling if you want to know who you are transacting with.
I am honestly not thrilled about the 20-1 stock split
The Wall Street Journal’s explanation:
**The 20-to-1 stock split will make Google’s shares more accessible to a broader array of investors by reducing the price tag of individual shares. In Alphabet’s case, it will convert each share valued at roughly $2,753 into 20 shares valued at $138.**
A slightly more interesting one is from CNBC:
**The stock split perhaps allows for that discussion to take place. For years, Alphabet’s high price made it impossible for the stock to be eligible in the price-weighted Dow Industrials. After the stock split though, Alphabet theoretically could be swapped out for IBM without little impact to the index since both are around the same stock price.**
The DOW managers would have to wrestle with GOOG’s three classes of stock, but adding it to a series of indexes would force additional buying which does not now exist.
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For sure Amazon stock plan doesn’t grant fractional.
For sure Google, the topic of this thread, does.
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So, here is the update, For whom it matters, Jan-10-2022 Amazon Stock plan will allow fractional shares.