Why aren't the stockholders complaining? (Come to think of it, I'm a stockholder of MS) Based on what I can find at Yahoo, that Morgan Stanley have revenue of 22.5B and revenue per share of $22, it appear that MS has about a billion shares of stock outstanding. If this bonus were paid out to shareholders, that would be a dividend of $11 per share, which is huge relative to the current price of $26. I'd make a lot of money, and if the share price rose to reflect the current P/E ratio of 16, the shares would roughly septuple in price, rising to near $175 a share, making me a ton more money. Now, I'm sure this analysis is simplistic, somebody with an MBA correct it, and some bonus to retain good people is needed, but it seems clear that stockholders have little or no say over these bonuses.
The second reason is that this represents a lot of profit for these companies. Microsoft made around 60 billion in 2008. And Exxon made 45 billion. So GS and MS are right up there with a monopoly and a record "windfall" profit from a huge multi-national corporation.
I'm not a socialist, I'm a free-market guy. But apparently the free market has failed here, cause there is no competition. Why are the companies using GS and MS to make investment deals paying so much? If they were not getting gouged, maybe they'd have more capital to invest to create or retain jobs. Where is the Walmart, the Dell, the E-Trade, the Amazon, the outsourcing to India, bringing higher efficiencies and lower prices?
In conclusion, not only are GS and MS too big to fail, they are too big to compete. As effective monopolies, they either need strict regulation, or they need to be broken up. In the meantime, maybe I'll rabble rouse amongst MS shareholders.
1 comment:
Hi,
Good Luck. The managers of Morgan Stanley are extremely well connected. Wall Street made large contributions to Obama and they are being rewarded for that. Also, how do I put this, everyone is so worried that if they turn turtle and sink that they will take the rest of the economy with them that there is no will to crack down on them at the moment.
That said, as you're well aware, I don't think these guys make anything like as much of a contribution to progress as they take out of the system. They certainly deserve a real crackdown, if only because they are to greed what Medal of Honor winners are to courage.
Ray,
Post a Comment