D.A. Davidson analyst Gil Luria advocated for a complete breakup of Alphabet to maximize shareholder value, amid ongoing antitrust investigations. His comments follow a small rise in Google stock due to positive trade news. Luria criticized Alphabet's management for focusing on short-term profits, arguing that a significant breakup would align with investor interests. Current legal challenges highlight Google's dominance in the online advertising and search sectors, threatening its market position against emerging competition from AI tools like ChatGPT. The discussion is further catalyzed by federal rulings against Googleâs monopolistic practices.
Investors want a big-bang breakup, not isolated spinoffs. We believe the company is headed towards an eventual passive aggressive spin off of advertising network and possibly Chrome/Android to appease Department of Justice.
We realize that a breakup would cause dis-synergies and that management is trying to maximize profit at the Alphabet level, but investors are much more interested in total shareholder value, not short-term profits.
Until management acts in the interest of shareholders, the entire business will trade at 16 times earnings, which assigns zero value to Waymo and severely undervalues YouTube, cloud and the ad network.
Federal judge Leonie Brinkema ruled that Google-parent Alphabet has used classic monopoly-building tactics to dominate online advertising. The DOJ has requested that Google be forced to sell its Chrome browser.
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