Jun. 2 at 4:34 PM
Alphabet plans to deploy a multi-pronged
$80B financing strategy w/ offerings consist of a
$30B underwritten public offering -- split b/n depositary shares representing mandatory convertible preferred stock, Class A common stock
$GOOGL & Class C capital stock
$GOOG -- and a
$40B ATM offering expected to launch in 3Q6
$BRK.B investment consists of
$5B in Class A shares priced at
$351.81 &
$5B in Class C shares at
$348.20.
$BRK.A began building its position in
$GOOG during 3Q25.
Alphabet stated that demand for its AI solutions from corporate enterprises & consumers exceeds its current compute supply & projects cap-ex spending b/n
$180B-
$190B for FY26, w/ expectations for a significant increase in FY27.
The
$40B ATM program will primarily address employee tax obligations tied to vesting equity awards. Alphabet plans to transition to a sell-to-cover model, using corporate cash to settle employee taxes & issuing equivalent stock thru the ATM program to replenish funds & expects ~
$30B of the ATM proceeds will be used for tax obligations in FY26
Note: Unlike a standard secondary offering where
$30B of stock is dumped onto the market all at once (causing an immediate price drop), an ATM program is highly strategic. Underwriters will likely only sell stock on green, high-volume days when the market can easily absorb the shares
Note:
$30B issuance represents only about 1.2% to 1.5% of the total company
Consider "Buffet Effect" - may create a floor price
Google Cloud revs increased +63% y/y in 1Q26 w/ a backlog nearly doubled q/q to more than
$460B - Developers using Google’s models now exceed 8.5M monthly & first-party API token processing increased 6x over the past year
Total Cash:
$126.84B
Total Debt:
$90.48B
TTM CFFO:
$174.35B
TTM FCF:
$64.429B
$GS JPM & MS are joint book-running managers
