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by jamestimmins 22 days ago
My first thought was my finance professor telling us that companies always raise with equity when they think their equity is overvalued.
1 comments
ip26 22 days ago
You’d think Berkshire would be at least passingly aware of that principle, though.
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gen220 22 days ago
It’s not easy to buy such a large tranche of shares at a fixed and fair price in a single transaction!

Both parties get something they want this transaction. Alphabet gets the Berkshire halo effect and a guaranteed buyer of $10 billion worth of equities, Berkshire gets a large tranche of equity at a price they believe is fair.

I think they view Alphabet as their next Apple, and a relatively safe place to ride out whatever happens with AI: Alphabet is fairly well positioned for the upturn or the downturn, especially now with this expanded warchest of cash.

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minraws 22 days ago
They are buying 10B$ worth of shares for 10% discount from current valuation, and if their goal is to hold for 10-20 years, then it could be a good hedged buy in favour of AI.

Even if AI crashes 90% SpaceX, OpenAI & Anthropic are worth say 200B each post IPO. In 10-20 years with similar effects to Internet they might be the next Meta. Apple, Microsoft of the world.

But Google will likely still be the leader if it can make good on it's advantages.

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