Google Buys You Tube for $1.65 Billion

[mr. sparkle]

That's a lot a dough joe.

[yt]QCVxQ_3Ejkg[/yt]

Break out the beer and hookers.

[Charles]

That's a lot a dough joe.

No. It's just paper money. No cash changed hands, only stock.

[FG Lurker]

No. It's just paper money. No cash changed hands, only stock.

Ever occur to you that they could sell some of that stock?

I wouldn't say "no" to 1.65 billion dollars of Google stock.

[nullpointer]

No. It's just paper money. No cash changed hands, only stock.

Even if there is a lock in period before the stock can be sold, as of now, Google stock is as good as gold.

[Charles]

Even if there is a lock in period before the stock can be sold, as of now, Google stock is as good as gold.

These things do matter. The transaction was for Google stock, and even if it's the stock could be sold for a boatload of money, it is not actual money YET.

This is one of my pet peeves about financial reporting. Whenever a company does a stock swap, they list its value in today's prices, rather than number of shares or percent ownership or whatever. And by the time the news is reported, the stocks are trading at some other price due to the big news, and the value is completely different. And let's not even get into lockin periods, etc.
This sort of sloppy thinking lead to abuses like the current backdated options scandals. The newspapers report someone got a million bucks worth of stock, but later it turns out to be backdated, but nobody cared because somehow they had the foolish idea that $1mil cash granted today is the same as $1mil cash granted 6 months ago. But it's not, because it was STOCK, not cash. Even if the uninformed masses that blindly buy stocks can't understand the system, there are plenty of people who CAN, and are taking advantage of everyone else.

[Mulboyne]

If you talk to a good private banker, they can arrange an equity swap transaction which will put cash in your bank account tomorrow. The calculation methodology is the same as that used in futures and options pricing. I think those deals should be outlawed but the financial industry has a knack of coming up with structures to get around regulations faster than regulators can frame new rules.

[FG Lurker]

If you talk to a good private banker, they can arrange an equity swap transaction which will put cash in your bank account tomorrow. The calculation methodology is the same as that used in futures and options pricing. I think those deals should be outlawed but the financial industry has a knack of coming up with structures to get around regulations faster than regulators can frame new rules.

And apparently faster than Charles can figure them out, too. (Not that this is particularly surprising...)

[nullpointer]

These things do matter. The transaction was for Google stock, and even if it's the stock could be sold for a boatload of money, it is not actual money YET.

Any IB dealing in stock futures would give you cash for it at a discount/premium (based on the option price of the stock at the end of the lockout period) right now as Mulboyne mentioned. Moreover, Youtube would have (presumably) entered the deal after calculating that GOOG stock would be worth more than cash in hand. GOOG jumped up by ~$10 after the announcement of the youtube buyout.

By your reasoning, nothing is actual money YET as even paper currency in hand is as good as the goverment/country backing it, if you look at money as a promise to exchange goods/services for it in the future.

[Captain Japan]

This is one of my pet peeves about financial reporting. Whenever a company does a stock swap, they list its value in today's prices, rather than number of shares or percent ownership or whatever.

I don't see it as misleading. The stories always cite the stock price on that day as the benchmark for the computation (in this case 1.65 billion). So if the stock price is, say, +/- 10% when the lock-in period is closed how is reporting the ownership percentage going to be all that much better for the news-reading public? As Mr. Sparkle said, that's still a lot of scratch.

[Charles]

By your reasoning, nothing is actual money YET as even paper currency in hand is as good as the goverment/country backing it, if you look at money as a promise to exchange goods/services for it in the future.

You may be right. I am old enough to remember the days when it was my after-school job to go down to my dad's store and sort through the paper money in the till, looking for Silver and Gold Certificates. I only found a couple per week, and usually small denominations, but I remember my dad would stick them right in his wallet and replace them with plain old greenbacks. I don't think those grubby old certificates had any numismatic value, I presume he cashed them in for real silver and gold.

[GuyJean]

That's wild.. How does YouTube do it? I mean, they must have thousands of servers!.. Anyone can upload any kind of shite video!..

It boggles the mind considering the constraints I've encountered with web video; data transfer, storage, etc..

GJ

[nullpointer]

Anyone can upload any kind of shite video!..
GJ

not to mention sunni and wahabi videos as well

[GuyJean]

not to mention sunni and wahabi videos as well

:p I'm partial to the wahabi babe videos..

GJ