The stock price of one of the world’s largest internet companies, which has been in a free fall for the past few months, is about to rise again. And it will be by way of a major merger that will result in a holding company with more than $61 billion worth of corporate bonds outstanding, and more than $16 billion in cash. The new combined entity should have a market capitalization that can compete with the combined Google and Amazon Web Services (AWS) — meaning it probably won’t need to borrow money from private investors. This deal should also increase competition for smaller phone service providers and help drive down average prices for data plans. However, while this deal gains immense benefits for consumers, there are significant risks as well. Let us take a look at what we know so far about this merger and the risks it poses for consumers.
What does the new company plan to do with all its money?
When Google, YouTube, and other companies go private, they usually become a collection of separate companies. This means that shareholders of the companies are left with few if any say in how those companies are run.
Google’s initial plan was to use its money to finance its investment in an initial public offering (IPA). However, under pressure from investors, the company has abandoned that plan and is instead trying to get in bed with a new private equity firm Google Capital. According to people familiar with the matter, the deal will amount to around $1 billion, or $61 billion if all goes well.
What happens when Google, YouTube, and others go private?
Google will become a wholly-owned subsidiary of Google Capital, which will own just under 10 percent of the new company. Google’s shares will remain listed on the S&P 500, and investors will have access to the same investment properties as before.
How much cash will be in this deal?
Google revealed that it will have around $700 million in cash and other assets ready to go when this deal goes through. That cash will come from a combination of private equity funds, venture capitalists, and government grants. This cash, along with Google’s debt, will be refinanced into equity in the new company at a later date.
Will the price of stock continue to rise?
The stock price of one of the world’s largest internet companies, which has been in a free fall for the past few months, is about to rise again. And it will be by way of a major merger that will result in a holding company with more than $61 billion worth of corporate bonds outstanding, and more than $16 billion in cash. That’s how much Alphabet (Google’s parent) and Broadcom are going to be agreed upon as part of the deal. The new combined entity should have a market capitalization that can compete with the combined Google and Amazon Web Services (AWS) — meaning it probably won’t need to borrow money from private investors. This deal should also increase competition for smaller phone service providers and help drive down average prices for data plans.
What happens when Google, YouTube, and others go private?
When Google, YouTube, and other companies go private, they usually become a collection of separate companies. This means that shareholders of the companies are left with few if any say in how those companies are run. However, in the case of Google, shareholders will have the option to create a new company that will be wholly owned by Google.
Google’s initial plan was to use its money to finance its investment in an initial public offering (IPA). However, under pressure from investors, the company has abandoned that plan and is instead trying to get in bed with a new private equity firm Google Capital. According to people familiar with the matter, the deal will amount to around $1 billion, or $61 billion if all goes well.
How much cash will be in this deal?
Google revealed that it will have around $700 million in cash and other assets ready to go when this deal goes through. That cash will come from a combination of private equity funds, venture capitalists, and government grants.
Will the price of stock continue to rise?
The stock price of one of the world’s largest internet companies, which has been in a free fall for the past few months, is about to rise again. And it will be by way of a major merger that will result in a holding company with more than $61 billion worth of corporate bonds outstanding, and more than $16 billion in cash. The new combined entity should have a market capitalization that can compete with the combined Google and Amazon Web Services (AWS) — meaning it probably won’t need to borrow money from private investors. This deal should also increase competition for smaller phone service providers and help drive down average prices for data plans.
