Google: logically flawed?
[tweetmemediggfacebook] When Google split their stock one staff member questioned the emotional effect on staff. An unfamiliar issue in the halls of Googleplex: logic rules (and the rules are logical).
Splitting stick is a common practice amongst large publicly owned companies who want to bring individual stock prices down, or issue more but leave the value of the business unchanged. If you owned 1 share priced at $400 and it was split into 10, $40 shares you’d still own $400 of the company. Perfectly logical.
During one of Google’s TGIF all-staff meetings where Larry and Sergey field questions from staff (any question) one member asked about the emotional effect of the recent stock-split. He was met with derision by Larry Page:
“It’s stupid. If you own ten shares at fourty dollars and one share at four hundred dollars, it’s the same thing! You just need to know how to divide.”
Googled. The End of the World As We Know It, Ken Auletta, pp24
The inference that illogical thinking was at the heart of perceiving the split was anything other than neutral to those affected was clear. The assertion that we are are either logical, or illogical is as unhelpful as it is untrue. We are both these things and a third state that is often ignored. We are non-logical. Or, as most commentators put it, non-rational. ([ax]http://thesaurus.com/browse/logical[/ax]They are synonyms, although their use is not wholly interoperable: logic is the fuel of rational argument, not the other way around.)
The interesting point here is not understanding why our non-rational brains might see this stock split as
[rightcol]removing value, it’s the absence of considering any position other than logic to understand the world.
Is this Google’s soft underbelly?
[ax]http://www.fooledbyrandomness.com/[/ax]Nassim Nicholas Taleb is the bestselling author of Fooled By Randomness and The Black Swan .The later’s 2.7 million copies sold in 31 languages led it to be described by The Times as one of the 12 most influential books of the past 60 years. He explores man’s – and his own – soft underbelly with wit and alacrity. His body of work best summed up by this quote from Chapter 3 ‘A Mathematical Meditation on History’ of Fooled By Randomness:
My problem is that I am not rational and I am extremely prone to drown in randomness and to incur emotional torture… My sole advantage in life is that I know… my weaknesses…
[ax]http://www.amazon.co.uk/Fooled-Randomness-Hidden-Chance-Markets/dp/0141031484[/ax]Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life, Nassim Nicholas Taleb
The brilliance of Larry Page and Sergey Brin – and the team that surround them – is validated by the dominance of their company. But as Ken Auletta puts it in Googled. The End of the World As We Know It:
“Whether they are also wise is not so clear cut.”