My first thought was my finance professor telling us that companies always raise with equity when they think their equity is overvalued.
My first thought was my finance professor telling us that companies always raise with equity when they think their equity is overvalued.
You’d think Berkshire would be at least passingly aware of that principle, though.
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.