Why Google's split will change the S&P 500 forever

http://www.cnbc.com/id/101535041
Posted Apr. 2, 2014

This articles discusses the ramifications of the Google stock split. Google effectively split their stocks on Wednesday. They are keeping the old Google shares and the new ones, making the S&P 500 have 501 components, even though it will only have 500 companies. The S&P 500 is a stock market index based on the capitalization of 500 large companies having common stock listed on NYSE or NASDAQ.
Google offered nonvoting shares with the voting shares that they had. This would then decrease the price of the shares because there were more and decreases the voting power of the shareholders. This prevents future disputes of power with investors who want the company to give more money. Class A shares can vote while Class C shares cannot, but both will be included in the S&P 500. This is something that has never happened before.

I think that this is groundbreaking for the future of the stock market. This is a good move on the part of Google so the company will not lose so much power as more and more people buy stock. There is a greater chance for growth and investment in their company. Our class is learning a bit about stocks through the Stock Market game and I am personally feeling the effects of the Google stock split. While I am losing a great deal of money during the split, I am hoping that I will be making money in the long run. Real investors will feel real effects from this decision. We, as a class can learn from the decisions of companies in the stock market how to respond. Real investors are also swayed in their decisions by the choice of companies like Google to make changes.

Works Cited

           "Google THIS!" Suzanne Evans. N.p., n.d. Web. 11 Apr. 2014.

Rosenburg, Alex. "Why Google's Split Will Change the S&P 500 Forever." CNBC.com. N.p., n.d. Web. 13 Apr. 2014.

Monopolies in a Market Economy

This week in Economics was all about competition. There are four types of competition: perfect competition, monopolistic competition, oligopolies, and monopolies. Perfect competition and monopolies are on opposite ends of the spectrum. Perfect competition has many sellers and more freedom to enter and exit the market. The buyers have control of the price of the product in perfect competition and sellers have control over the price of the product in a monopoly. There are 4 types of monopolies: natural, governmental, technological, and geographical.
I found that the different types of monopolies provided a new perspective on them. We discussed how each monopoly can be helpful. The idea that a natural monopoly can actually decrease the price of a product was introduced. We also talked about how the government has monopolies on certain goods and services because they are not profitable for private enterprise, but they are necessary. We also found out that there are technological monopolies because they have a patent that lasts 20 years. When a business is formed far away from any business that offers that same good, they have a monopoly on that product. These monopolies all have different reasons for forming and they can have either a negative or a positive effect on the economy.
The concept of these monopolies is very important because people can understand whether or not the monopoly is either good or bad for the economy. The knowledge that we gained this week gives us a greater understanding of the business world. This helps us understand why the government does or does not work to fight a monopoly. The help or hurt that the monopoly can cause is essential to understand in the future if we are ever to start a business so that we understand how to make the greatest price while getting the greatest profit.

Works Cited

"Russian Election Monopoly Board." The Poke. Web. 04 Apr. 2014.