As the Wall Street Journal reminds us today, in early 2009 Google re-priced a large number of options at much lower strike prices. 7.6 million options with an average strike price of $522 were exchanged for an equivalent number exercisable at $308.57. This narrowly missed the low for the year of $282.75. Google now trades at just under $600. Is this consistent with Google’s pledge to “do no evil”?
The Wall Street Journal published a front page article this morning regarding how many companies are hoarding record high levels of cash. The tendency to hoard liquid assets can be viewed as a “survival instinct” in light of the turmoil in the financial markets and specifically the near death experience many companies faced when the commercial paper market ground to a halt during the worst of the financial crisis. However, taken to extreme levels, this hoarding instinct can clearly destroy shareholder value.