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Fun aside, the analysis is impartial because it's only looking at Class A (1 Vote per Share) and Class C ( 0 Vote per share).
Class B (10 votes per share) don't trade publicly on the open market.
So using this 'premia' is fruitless.
Mini-Thread below. https://twitter.com/mgnr_io/status/1379273776517558274
Class B (10 votes per share) don't trade publicly on the open market.
So using this 'premia' is fruitless.
Mini-Thread below. https://twitter.com/mgnr_io/status/1379273776517558274
If you know Google, you know Sergey and Larry were pioneers of the no-vote, capital shares only phenomena in the early 2010s.
They were unyielding with their vision and refusal to relinquish control of the company.
They were unyielding with their vision and refusal to relinquish control of the company.
Here's how the economic ownership and the voting power really look like.
So Class B effectively controls 60% of Alphabets future. And Sergey and Larry own ~85% of B Shares.
They control 51% of the company.
They control 51% of the company.
Maybe there is a kernel of truth of comparing A and C
But say you were insanely wealthy, you would need to purchase 300.7 million shares of A to own 40% of the company going forward.
It would cost you a casual $678 Bbbbbbullion.
But say you were insanely wealthy, you would need to purchase 300.7 million shares of A to own 40% of the company going forward.
It would cost you a casual $678 Bbbbbbullion.
I mean... let's assume you were Uncle Warren or Daddy Bezos rich, why would anyone purchase $678 billion of stock to effectively be a lap-dog to Sergey and Larry?
So we need ask ourselves what the premium of Class B shares are?
This is more speculative, but the share price of B wouldn't be linear.
This is more speculative, but the share price of B wouldn't be linear.
The first 5% -10% of B would contain a massive premium and scale down because if you able to own just 5-10% of B, you would change the destiny of Alphabet forever.
Said differently, Brin & Page would chop off their arms for 1.51%.
Said differently, Brin & Page would chop off their arms for 1.51%.
So they explicitly control 51%, and we don't even know how much implicit control they have as tactical founders...poison pills, comp committee influence, black-balling members, etc...
We also have to ask what the value of google would be if they weren't stewards of the company.... no two companies are like b/c management is different across the board.
I don't mind @StaniKulechov running the show at
@AaveAave and I might be happy to purchase at a slight discount (if it wasn't governance token).
But someone might not see it that way, and think those shares are less valuable because he's a terrible founder.
@AaveAave and I might be happy to purchase at a slight discount (if it wasn't governance token).
But someone might not see it that way, and think those shares are less valuable because he's a terrible founder.
Here's a little finding:
'In the United States. Lease, McConnell
and Mikkelson (1983) found that voting shares in that market trade, onaverage, at a relatively small premium of 5-10% over non-voting shares.'
'In the United States. Lease, McConnell
and Mikkelson (1983) found that voting shares in that market trade, onaverage, at a relatively small premium of 5-10% over non-voting shares.'
'Premiums of a magnitude similar to those found in the United States (5-10%) were found in the United Kingdom and Canada. Much larger premiums are reported in Latin America (50-100%), Israel (75%) and Italy (80%).'
All of this to say, governance is valuable... even if you can't see it in today's environment.
Once our legal infrastructure catches up to DAOs and proposals -- it will eventually -- it won't be 'muh useless governance token' .
Once our legal infrastructure catches up to DAOs and proposals -- it will eventually -- it won't be 'muh useless governance token' .
