Alphabet (GOOG) 🌐 - Share Chat

Dude’s out of prison?!

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Yeah they let him out about 3 months ago give or take. Not that he was ever in a real prison

Looks like Sundar wants Alphabet to get off the couch and get in shape, which of course means more things are heading to the killed by Google graveyard.

The instability of Google Hardware means no dead product is ever truly dead. Google quit making tablets in 2015, came back for Chrome OS tablets in 2018, then quit for another three years, and now it’s planning to launch a new Android tablet in 2023. Surely, we’ll get another Google laptop someday, but we’ll just have to wait a few more years.

So the question is, do you trust Google with your money when you’re shopping for a new piece of tech?

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Yes, interesting article on CNBC which says:

The spinout comes as Google parent Alphabet reckons with a slowdown in ad spending and looks to advance or wind down experimental projects.

The article is primarily about the spin out of Aalyria:

More details on Aalyria:

https://www.bloomberg.com/news/articles/2022-09-12/google-loon-technology-lives-on-at-aalyria-technologies

The article gives a glimpse into the software named Spacebeam and the wireless technology it calls Tightbeam. Tightbeam is a laser based wireless comms system. And this technology will face a great of scrutiny as:

“This is an area that is littered with the bodies of dead companies.”

I do, I love the Pixel 5 phone. I spent a few weeks researching the best phone for me.

Isn’t the most expensive, but is not too large and it’s not like Samsung phones where you get all this Samsung bloatware.

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Lovely. $105 has been my target price for a while. I have an average of $102. I wonder if I should wait just a bit longer to buy below my average…

I’d be slightly wary. In the entire lifetime of Google, it’s only ever been higher than your aforementioned price within the last 18 months. Beware the bargain. I’d still buy it at this price tho personally!

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I do, Pixels are amazing phones, but even better when considering the price.

The Aalyria move makes sense to me given Alphabet’s position with SpaceX (one of the largest shareholders and now holding the ground station networking) it sort of seems like Starlink is the successor to Loon for them

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I don’t care. I’m waiting for $102 :slight_smile:

Your average is almost irrelevant imo.

The real question is whether you view it as a good buy at its current price for the time period you are looking to hold.

Personally, I’m happy to buy at current price with a long term (10+ year horizon) and have no idea what my average is.

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They seem to have a low conviction on so many products, I think the pixel phones are a rare exception to this rule and are broadly fantastic. The panda with the yellow button was a great design.

They get so much runway to behave like this because of their search behemoth. That said I don’t want to see companies playing it safe too often and not trying things - it’s a difficult balance to strike.

The EU takes issue with the way Google licenses Android and associated Google apps like the Play Store to manufacturers. The Play Store and Google Play Services are needed to build a competitive smartphone, but getting them from Google requires signing a number of contracts that the EU says stifles competition.

If the market is being rational, and haven’t priced this in, it should be a $78BN hit to the market cap.

Assuming you’ve taken 4bn * 19p/e, I don’t think that stands. On the assumption this is a one off that is.

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By that logic, if they had a $70B fine, the share price would go to zero.

I think you have to compare the fine to that value of earnings discounted over time.

The fine should largely be priced-in already (at least discounted by probability of this being confirmed) as this was nothing new.

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Agreed, I think the most cited risk in most people’s valuation of Alphabet is regulation/antitrust which in aggregate is probably priced in the $100bns (at least if you crudely compare the level of discounting of earnings to peers like Apple, Microsoft)

This might trigger a minor Bayesian update in some investors, i.e. people might update their prior expectations of the probability/extend of further regulatory rulings but for most this is likely in the range of expectations.

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Even if this is true ($78BN) consider this: the market capitalisation of Google is around $1360 billion. $78 billion is ‘only’ just under 5% of the market cap. 12 of Sept the stock closed at $110.89, 14 of Sept it closed at $105.01. That is a drop of just over 5%.

My point is that you could argue that the market did price it in. Yeah, I know it is hard to pin the drop just down to the fine. But you know, what’s 5% between friends, all this is submerged in the volatility of the stock.

It’s probably a vast over simplification of which I should probably have qualified better. Also as @AchillesFirstStand points out it should be viewed in DCF terms.

Chalk this down to a

image

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I do really like Alphabet and with much of the regulatory pressure baker into the share price could see them as a growth opportunity.

With pressure on TikTok growing YouTube stands only to benefit and that’s while they’re still commanding a huge amount of people’s time.

It hit $102 as I expected. Bought some today :+1: