Liberty Posted November 12, 2019 Author Share Posted November 12, 2019 https://stratechery.com/2019/the-google-squeeze/ Link to comment Share on other sites More sharing options...
mikazo Posted November 20, 2019 Share Posted November 20, 2019 Interesting thread about Stadia https://twitter.com/mcclure111/status/1196557401710837762?s=21 Link to comment Share on other sites More sharing options...
Liberty Posted November 20, 2019 Author Share Posted November 20, 2019 Matt Ball thread on Stadia: Link to comment Share on other sites More sharing options...
Liberty Posted December 3, 2019 Author Share Posted December 3, 2019 https://www.blog.google/inside-google/alphabet/letter-from-larry-and-sergey/ Link to comment Share on other sites More sharing options...
Spekulatius Posted December 3, 2019 Share Posted December 3, 2019 https://www.blog.google/inside-google/alphabet/letter-from-larry-and-sergey/ Seems like GOOG shareholders like the change - GOOG stock is up 1.25% when the market is down 1%. I remember what happened to OXY stock when Armand Hammer slipped in his bathroom and broke a rip. https://www.latimes.com/archives/la-xpm-1987-06-18-mn-8023-story.html Link to comment Share on other sites More sharing options...
Liberty Posted December 19, 2019 Author Share Posted December 19, 2019 https://www.vox.com/recode/2019/12/18/21010108/larry-page-philanthropy-foundation-donor-advised-fund-christmas Link to comment Share on other sites More sharing options...
Liberty Posted January 17, 2020 Author Share Posted January 17, 2020 AlphaFold piece in Nature: https://www.nature.com/articles/d41586-019-03951-0 Link to comment Share on other sites More sharing options...
Liberty Posted January 20, 2020 Author Share Posted January 20, 2020 Sundar Pichai op-ed about AI regulation: https://www.ft.com/content/3467659a-386d-11ea-ac3c-f68c10993b04 Link to comment Share on other sites More sharing options...
griezeman23 Posted February 4, 2020 Share Posted February 4, 2020 Google committing to $6bn+ per quarter, $24bn per year, in buybacks. Also, the co. did provide way more disclosure. You can really see the changes being made by Ruth and Sundar with Larry and Sergei gone. I wonder if the larger share repurchases point to Google moving into a bit more of a harvest mode, with regard to certain businesses of course (Networks and Search spring to mind). Now with a 2.5% buyback yield plus all the associated growth even at ~30x trailing FCF (CFO - CapEx), ex-cash, its not a terrible value proposition even with the regulatory overhang. THe co. still has plenty of catalysts (Waymo, Cloud scaling, YouTube scaling) too. Link to comment Share on other sites More sharing options...
dutchman Posted February 4, 2020 Share Posted February 4, 2020 the buybacks barely cover dilution Link to comment Share on other sites More sharing options...
griezeman23 Posted February 4, 2020 Share Posted February 4, 2020 Ah yes, forgot about dilution. Still share count is down another 5mn y/y. So closer to 5/7 of a percent a year in a "buyback" yield, which is more or less nothing. Just got excited re-reading the call! Definitely, the best call I have listened to in several years... Link to comment Share on other sites More sharing options...
Liberty Posted February 4, 2020 Author Share Posted February 4, 2020 They broke out Google Cloud but include G Suite numbers with GCP, so we still can't know for sure... I wish they'd just have GCP. Otherwise, it's like MSFT putting Office 365 numbers with Azure, makes things less clear. Link to comment Share on other sites More sharing options...
StevieV Posted February 4, 2020 Share Posted February 4, 2020 Ah yes, forgot about dilution. Still share count is down another 5mn y/y. So closer to 5/7 of a percent a year in a "buyback" yield, which is more or less nothing. Just got excited re-reading the call! Definitely, the best call I have listened to in several years... I sometimes see share buybacks dismissed because they only offset dilution. As in, a company shouldn't do buybacks because it only offsets dilution. While I can share in the disappointment of share count not actually decreasing, I think that share buybacks offsetting dilution should not be dismissed. Share issuances and buybacks are two separate decisions. If a company is going to issue shares, they are going to do so whether or not they have a buyback. Say you have 2% dilution due to share issuances. A 2% buyback isn't a bad thing or worthless. It is the difference between a flat share count and 2% dilution. If someone doesn't like it, they should direct their ire at the share issuances, not the buyback. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted February 4, 2020 Share Posted February 4, 2020 I sometimes see share buybacks dismissed because they only offset dilution. As in, a company shouldn't do buybacks because it only offsets dilution. While I can share in the disappointment of share count not actually decreasing, I think that share buybacks offsetting dilution should not be dismissed. Share issuances and buybacks are two separate decisions. If a company is going to issue shares, they are going to do so whether or not they have a buyback. Say you have 2% dilution due to share issuances. A 2% buyback isn't a bad thing or worthless. It is the difference between a flat share count and 2% dilution. If someone doesn't like it, they should direct their ire at the share issuances, not the buyback. I don't think it's irritation from buybacks offsetting dilutions (or partial dilutions). I think the point was that when one does a relatively simple FCF calc (OCF - capex) the number is misleading, bc dilution can be significant, especially for tech companies. My quick math suggests that half of the buybacks went to offset dilution last year for Google. Not that they shouldn't have done the buyback - just that if I'm looking at a FCF yield I need to be sure that I'm doing apples to apples, or at least remember to take out the dilution impact from my figures. Link to comment Share on other sites More sharing options...
villainx Posted February 4, 2020 Share Posted February 4, 2020 The way I see it is what was rate of dilution prior to buyback starting. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted February 5, 2020 Share Posted February 5, 2020 I sometimes see share buybacks dismissed because they only offset dilution. As in, a company shouldn't do buybacks because it only offsets dilution. While I can share in the disappointment of share count not actually decreasing, I think that share buybacks offsetting dilution should not be dismissed. Share issuances and buybacks are two separate decisions. If a company is going to issue shares, they are going to do so whether or not they have a buyback. Say you have 2% dilution due to share issuances. A 2% buyback isn't a bad thing or worthless. It is the difference between a flat share count and 2% dilution. If someone doesn't like it, they should direct their ire at the share issuances, not the buyback. I don't think it's irritation from buybacks offsetting dilutions (or partial dilutions). I think the point was that when one does a relatively simple FCF calc (OCF - capex) the number is misleading, bc dilution can be significant, especially for tech companies. My quick math suggests that half of the buybacks went to offset dilution last year for Google. Not that they shouldn't have done the buyback - just that if I'm looking at a FCF yield I need to be sure that I'm doing apples to apples, or at least remember to take out the dilution impact from my figures. It also makes it less comparable because those are comp expenses that aren't really flowing through the income statement. If you wanted a more accurate picture of the business, hold share count constant and add that $6B/quarter to G&A to get a realistic ROE figure. You could even discount it a bit to reflect those treasury shares appreciating, but point is it's just obfuscation at the point and people talk about how large the buybacks are ( a supposed positive) instead of how large the G&A expense is (a supposed negative). Just allows for the narrative to be manipulated or hidden Link to comment Share on other sites More sharing options...
griezeman23 Posted February 5, 2020 Share Posted February 5, 2020 I sometimes see share buybacks dismissed because they only offset dilution. As in, a company shouldn't do buybacks because it only offsets dilution. While I can share in the disappointment of share count not actually decreasing, I think that share buybacks offsetting dilution should not be dismissed. Share issuances and buybacks are two separate decisions. If a company is going to issue shares, they are going to do so whether or not they have a buyback. Say you have 2% dilution due to share issuances. A 2% buyback isn't a bad thing or worthless. It is the difference between a flat share count and 2% dilution. If someone doesn't like it, they should direct their ire at the share issuances, not the buyback. I don't think it's irritation from buybacks offsetting dilutions (or partial dilutions). I think the point was that when one does a relatively simple FCF calc (OCF - capex) the number is misleading, bc dilution can be significant, especially for tech companies. My quick math suggests that half of the buybacks went to offset dilution last year for Google. Not that they shouldn't have done the buyback - just that if I'm looking at a FCF yield I need to be sure that I'm doing apples to apples, or at least remember to take out the dilution impact from my figures. It also makes it less comparable because those are comp expenses that aren't really flowing through the income statement. If you wanted a more accurate picture of the business, hold share count constant and add that $6B/quarter to G&A to get a realistic ROE figure. You could even discount it a bit to reflect those treasury shares appreciating, but point is it's just obfuscation at the point and people talk about how large the buybacks are ( a supposed positive) instead of how large the G&A expense is (a supposed negative). Just allows for the narrative to be manipulated or hidden Hmmm. I don't really get what you are getting at here. SBC is obviously less (on a true value basis) than reported, as the SBC number reported on the CF statement can be way below buybacks when stock prices are rising leading to the share count barely budging. But if we are adding buybacks into G&A aren't we way over-penalizing Net income and RoE? Should we not add SBC back to net income, subtract off the $6bn in buybacks, and then calculate RoE from there? I also imagine this technique for calculating "true" RoE really only works when the net buyback yield is effectively 0 - like in GOOGL's case. Thanks for any help with clarification. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted February 5, 2020 Share Posted February 5, 2020 It also makes it less comparable because those are comp expenses that aren't really flowing through the income statement. If you wanted a more accurate picture of the business, hold share count constant and add that $6B/quarter to G&A to get a realistic ROE figure. You could even discount it a bit to reflect those treasury shares appreciating, but point is it's just obfuscation at the point and people talk about how large the buybacks are ( a supposed positive) instead of how large the G&A expense is (a supposed negative). Just allows for the narrative to be manipulated or hidden Hmmm. I don't really get what you are getting at here. SBC is obviously less (on a true value basis) than reported, as the SBC number reported on the CF statement can be way below buybacks when stock prices are rising leading to the share count barely budging. But if we are adding buybacks into G&A aren't we way over-penalizing Net income and RoE? Should we not add SBC back to net income, subtract off the $6bn in buybacks, and then calculate RoE from there? I also imagine this technique for calculating "true" RoE really only works when the net buyback yield is effectively 0 - like in GOOGL's case. Thanks for any help with clarification. Twocities - I agree 100% with your logic. I tend to look more at FCF figures rather than P&L figures, so I adjust it on a share neutral basis for FCF. griezeman23 - I think Twicities was just short handing the ROE point. I think the right way to do it would be to back out SBC, put in a number that one believes to be a run-rate number, and then tax affect it to get to a "truer" ROE. The reason I don't think it makes sense to just add back the share neutral buyback/SBC cash payments is that it's not clear the time period in which those expenses were incurred. For example, while options generally vest between 3-5 years, their maturity is generally 10 years from time of issuance (not vesting). As such, one might have 5-7 years left on an option when it's fully vested. For some people they would exercise the moment it becomes vested, while for others who are maybe more financially savvy they would wait it out since that 5-7 years is hugely valuable. Of course, you also have instances where the share price also influence people's willingness to exercise, etc. All this is to say that I don't think it's analytically appropriate to just add back same year buyback/cash payments. I don't have a better method outside of trying to get a sense of the company's SBC structure through the proxy statement and making some assumptions for future share dilution based on your expected share price (where it becomes circular...) Link to comment Share on other sites More sharing options...
Castanza Posted April 2, 2020 Share Posted April 2, 2020 https://www.bloomberg.com/news/features/2020-04-01/how-much-water-do-google-data-centers-use-billions-of-gallons Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 28, 2020 Share Posted April 28, 2020 What you guys think about Alphabet/Google earnings? https://abc.xyz/investor/static/pdf/2020Q1_alphabet_earnings_release.pdf?cache=4690b9f Earnings: $9.87 per share, adjusted Revenue: $41.16 billion Cloud revenue: $2.78 billion YouTube advertising revenue: $4.04 billion Traffic acquisition costs: $7.45 billion Alphabet’s revenue growth rate slowed to 13% in the quarter from 17% one quarter earlier, according to a statement. Advertising still makes up the vast majority of Alphabet’s total revenue, at 82%. Link to comment Share on other sites More sharing options...
valueinvestor Posted April 29, 2020 Share Posted April 29, 2020 What you guys think about Alphabet/Google earnings? https://abc.xyz/investor/static/pdf/2020Q1_alphabet_earnings_release.pdf?cache=4690b9f Earnings: $9.87 per share, adjusted Revenue: $41.16 billion Cloud revenue: $2.78 billion YouTube advertising revenue: $4.04 billion Traffic acquisition costs: $7.45 billion Alphabet’s revenue growth rate slowed to 13% in the quarter from 17% one quarter earlier, according to a statement. Advertising still makes up the vast majority of Alphabet’s total revenue, at 82%. It’s in line with what I expected - I don’t put too much weight on slower revenue growth because sometimes growth slows down for a myriad of reasons. However, I feel the slower revenue growth is due to COVID-19. I would be surprised if revenue growth does not slow down by another 25% next quarter. Link to comment Share on other sites More sharing options...
LightWhale Posted May 12, 2020 Share Posted May 12, 2020 15% of world internet traffic is YouTube: https://www.sandvine.com/covid-internet-spotlight-report?utm_source=Benedict%27s+Newsletter&utm_campaign=bad600675e-Benedict%27s+Newsletter+335&utm_medium=email&utm_term=0_4999ca107f-bad600675e-71072793&mc_cid=bad600675e&mc_eid=fc1b468fd1 Link to comment Share on other sites More sharing options...
Liberty Posted May 15, 2020 Author Share Posted May 15, 2020 https://www.wsj.com/articles/justice-department-state-attorneys-general-likely-to-bring-antitrust-lawsuits-against-google-11589573622 Both the Justice Department and a group of state attorneys general are likely to file antitrust lawsuits against Alphabet Inc.’s Google—and are well into planning for litigation, according to people familiar with the matter. The Justice Department is moving toward bringing a case as soon as this summer, some of the people said. At least some state attorneys general—led by Texas Attorney General Ken Paxton, a Republican—are likely to file a case, probably in the fall, people familiar with the matter said. Much of the states’ investigation has focused on Google’s online advertising business. The company owns the dominant tool at every link in the complex chain between online publishers and advertisers. The Justice Department likewise is making Google’s ad technology one of its points of emphasis. But it is also focusing more broadly on concerns that Google uses its dominant search business to stifle competition, people familiar with the matter said. Link to comment Share on other sites More sharing options...
Castanza Posted May 15, 2020 Share Posted May 15, 2020 Can’t wait to pick up more shares at a discount. Google provides superior products (most for free). Link to comment Share on other sites More sharing options...
Liberty Posted July 9, 2020 Author Share Posted July 9, 2020 Interesting: https://ai.googleblog.com/2020/07/automl-zero-evolving-code-that-learns.html Link to comment Share on other sites More sharing options...
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