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Alphabet Becomes the Most Valuable Public Company in the World

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Re: Alphabet Becomes the Most Valuable Public Company in the World

#331

Post by whack »

dragonwriter wrote: post #88
whack wrote: post #76

Kudos to Google. I'm happy for them. But it's also worth pointing out that Market Cap is a horrendous way to measure how "valuable" or "powerful" a company is. Companies A and B both want to raise $10B to fund a new investment opportunity. A decides to issue corporate bonds, because it doesn't want to dilute its shareholders. B decides to issue new equity instead, because they feel that their company stock is actuall…

> A decides to issue corporate bonds, because it doesn't want to dilute its shareholders. B decides to issue new equity instead, because they feel that their company stock is actually overvalued at the moment. Net result: A's market cap remains the same. B's market cap increased by $10B. No difference in future projected earnings/revenue between the 2 of them, but B now leads A in market cap. Er, there is a differenc…

You've overlooked a number of vital points that render your logic false. I could explain it to you, but I doubt you'll believe me. This is a very technical and complicated issue. Google for Modigliani-Miller Theorem. It addresses exactly the fallacy you've described.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#332

Post by Tycho »

Dr_tldr wrote: post #200
hollerith wrote: post #177

Earlier quoted context omitted.

By the same reasoning, the most valuable companies should be the dominant suppliers of food, water, electricity and maybe gasoline and basic internet connectivity.

You mean like ExxonMobil, Comcast, and Monsanto? Wait, what was your point?

Monsanto isn't really that big.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#334

Post by whack »

gefh wrote: post #106
whack wrote: post #76

Kudos to Google. I'm happy for them. But it's also worth pointing out that Market Cap is a horrendous way to measure how "valuable" or "powerful" a company is. Companies A and B both want to raise $10B to fund a new investment opportunity. A decides to issue corporate bonds, because it doesn't want to dilute its shareholders. B decides to issue new equity instead, because they feel that their company stock is actuall…

Scenario 1: B's existing public equity and future EPS is diluted by the new issue, and the market cap should remain similar. Scenario 2: A's share price now has a dividend stream implying future returns, which will increase the future value of the shares. Yes, the market cap will drop by $15B on the dividend date, but two similarly performing companies, one paying predictable dividends, and one not, should already be…

Scenario 1: B's existing public equity and future EPS is diluted by the new issue, and the market cap should remain similar.

This is factually false. Ask anyone with a background in finance and they will tell you so.

Scenario 2: A's share price now has a dividend stream implying future returns, which will increase the future value of the shares.

If companies A and B start off with the exact same market cap, and generate the exact same profits every year, and A keeps paying off the profits in the form of dividends, and B refuses to do so and hoards the profits in its bank account, B's market cap will keep rising further and further ahead of A's market cap. Again, this is a basic financial fact, and anyone with a background in finance will tell you so.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#335

Post by Dolores12 »

cryptoz wrote: post #35

The comparisons between Google and Apple aren't as apples-to-apples as everyone in the media seems to think. If we're talking about the future of these companies, and their earning power, they are situating themselves very differently. Apple is really a consumer electronics company, Google is an artificial intelligence company. And investors think more money will be in the future of AI instead of consumer hardware an…

Apple is an Iphone company, not consumer electronic one.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#336

Post by rokhayakebe »

CydeWeys wrote: post #282
rokhayakebe wrote: post #246

Earlier quoted context omitted.

Effectively or Efficiently? I can search the internet way better. Email me what you are looking for and 9 times out of 10 I will send you back something better than what Google will spit out. Furthermore you won't even have to sift through 10 links, or change your search, I will do all this and send you the result back.

This is such an incomprehensible boast. Do I think that you might be able to deliver me handpicked results that are better than a Google search? Sure. Can you do it for me in 100ms or better, and at no cost? What are you even proposing, human search agents? That's absurd.

Do I think that you might be able to deliver me handpicked results that are better than a Google search? Sure.

Ok, so you agree partially.

Can you do it for me in 100ms or better

Not all searches require an immediate reply, so I'll just focus on those. Looking at the list of the most expensive keywords on Google, it is safe to say the vast majority consist of searches that do not necessitate a decision at the moment of the first try. Think Attorney, Insurance, Travel.

and at no cost?

Yes. It is free, and ad supported.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#337

Post by rtpg »

msh wrote: post #323
Reedx wrote: post #319

Earlier quoted context omitted.

This is an annoying meme. Are concession stands the flagship product of movie theaters? People use Google for search, email, maps, etc. And that's what the company was built for. If they had a better way to monetize than ads, they would certainly drop ads.

If that was how they made most of their money, yes.

So is McDonalds a drink company? It makes most of its money from drinks...

The way a company makes its money is only weakly correlated to the service it offers to users. Think about it: if McDonalds stopped selling food, it would not have any customers. If Google stopped offering search, it would not have any users.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#338

Post by rokhayakebe »

ikawe wrote: post #267
rokhayakebe wrote: post #246

Earlier quoted context omitted.

Effectively or Efficiently? I can search the internet way better. Email me what you are looking for and 9 times out of 10 I will send you back something better than what Google will spit out. Furthermore you won't even have to sift through 10 links, or change your search, I will do all this and send you the result back.

I bet you'll use google to do it.

Taking the most expensive keywords as a source: Attorneys, Insurance, Travel, etc... I'll use SuperLawyers + Avvo + Yelp for Attorneys. I'll go directly to insurance websites and compare rates. I'll go to Kayak, CheapOAir, Hipmunk and the likes for travel.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#339

Post by sdenton4 »

toomanybeersies wrote: post #218
shimon wrote: post #110

Earlier quoted context omitted.

Google's flagship product is a box that you can type words into, and get relevant texts/references/facts in response. It seems like a textbook example of AI.

Google's flagship product is an advertising platform, not a search box.

Nah, Google is a company that turns protobuffers into more differenter protobuffers.

Re: Alphabet Becomes the Most Valuable Public Company in the World

#340

Post by partiallypro »

cryptoz wrote: post #35

The comparisons between Google and Apple aren't as apples-to-apples as everyone in the media seems to think. If we're talking about the future of these companies, and their earning power, they are situating themselves very differently. Apple is really a consumer electronics company, Google is an artificial intelligence company. And investors think more money will be in the future of AI instead of consumer hardware an…

Both are at "peak margin," but Google's margins will fall slower than Apple's. Hardware margins are notoriously hard to maintain, Apple is the outlier, and it can't last forever.
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