VenChar

Google Stock Split

Normally I take very little interest in commenting on Google since it seems the whole blogosphere is rife with Google coverage.  However this post by John Battelle got my interest (btw John's coverage on the search space is top class and always worth a read)

Will Google split its stock? Given its love of Buffet, probably not, says Bloomberg News. So does that mean smaller investors will be priced out of owning it? Yes and no. Yes, they probably can't own it if if keeps going up - Buffet's stock is at 84K or so - but they can always buy a fund that owns it. In other words, if Google does not split, it'll end up being owned mostly by institutions.

Prices such as Google's make it more difficult for individual, or retail, investors to buy and sell stock, according to David Ikenberry, a finance professor at the University of Illinois in Champaign.

``It's clear that higher sales price equates with higher institutional ownership,'' Ikenberry said in an interview. ``At a certain level, the retail market gets priced out.''

I realize that John is quoting a bloomberg story in which the reporter is in turn quoting a finance professor (David Ikenberry) and my limited dealing with the media has convinced me that words spoken to a reporter don't necessarily turn out the right way in print. 

That being said this statement by the professor makes no sense.  The stock price has no rational bearing on its attractiveness or not (its market cap has but not the stock price).  If you are a retail investor and you wanted to invest $1500 in Google you still can whether the stock price is $10 or $300.  In one case you get 150 shares and in the other 5 but the reality is that you own the same amount of the company.  The only time this stops being true is when the stock price goes so high that it expands beyond the reach of most retail investors (Berkshire at $80,000 comes to mind) but even with Berkshire, you have a Class B stock at $2800.

 

The Desi Trifecta in the Spelling Bee

The 78th Annual spelling Bee competition finished today and the top 3 finishers were:

1. Anurag Kashyap
2. Aliya Deri
3. Samir Patel

A desi trifecta. Its fair to say that South Asians usually don't set the field on fire with their athletic exploits but they definitely seem to know how to do well in Spelling Bee.  Amar Shah of ESPN has a great article on the Indian American phenomenon in Spelling Bee.  Some of the stats are impressive:

Although representing less than 1 percent of the U.S. population, Indian-Americans made up around 15 percent of last year's participants. This year's spelling bee continued the trend, as 31 competitors of Indian origin (according to rediff.com, an Indian news portal) vied for the coveted title of the nation's best speller. Seven of the 17 contestants from Texas were Indian-American, and Puerto Rico's lone representative was none other than Arun.

While its easy to look at this year's results as a coincidental outcome for Indian-Americans, I actually look at the results and remain in awe of America.  For the people shouting from the rooftops on how America is declining, how China and India are gaining on us, how our best days are over, blah, blah, blah .  . . all I have to say is that can you think of one other country in the world where this could happen.  Where a group of kids born to immigrant parents come to a new land and have enough opportunities (and also drive and hard work) to learn a new language and be the top 3 finishers in the national spelling contest.  Nada, nyet, not one.  This is what makes America tick.  Our ability to welcome and absorb people of all hues into our melting pot.  Until that phenomenon stops, my money will always be on America.

Update 1: The NYtimes also has a post on the phenomenon of Indian-Americans and the spelling bee . . . my only quibble on the article is that it makes it out like Indian-Americans follow the spelling bee like a cult.  The reality is that this community values academics very highly (and in the same token devalues athletics and worships bollywood) so coverage of any academic achievement is strong.  The ethnic media just the last few weeks covered the National Geographic Bee (where an Indian-American kid came in second) as well as the Intel Science Talent winners.