Alphabet Inc. faces increasing antitrust scrutiny, and while a forced breakup of the company may not be imminent, it wouldn’t be a doomsday scenario either, according to a Bernstein analyst.
“While we can debate the merits and probabilities of breaking up big tech, we believe the nuclear scenario is arguably value-accretive for Google,” he wrote. “And therein lies the relative cushion for owning Google amidst growing scrutiny of big tech.”Alphabet’s search business represents the majority of the company’s value in Shmulik’s sum-of-the-parts valuation—at $1,499 a share in the base case and $1,651 a share in the bull case.
Shmulik also has a $1,700-a-share, bear-case scenario based on this methodology, and this model, among other things, ascribes negative value to the “other bets” collection of businesses, which includes self-driving unit Waymo and other earlier-stage ventures. Still, he says, “it’s hard to believe that we won’t see Waymo command some value in the open market given [driverless-car company] Cruise recently raised at a ~$30 billion valuation.
Sounds good.
Did another whale join
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