Google shared a result from its years of enormous startup investing for the first time on 23 April and the holdings are worth about $11 billion, based on company estimates.
A new accounting rule prompted Google parent Alphabet Inc. to disclose the fair value of its private stock holdings in earnings reports starting this year. The figure disclosed includes the company’s stake in some of Silicon Valley’s most highly valued private firms, such as Uber Technologies Inc., Airbnb Inc., and Stripe Inc.
Alphabet had previously reported private stock holdings based on the price it paid for the shares. Last quarter, the company said those holdings were worth $7.81 billion. After the accounting change this quarter, Alphabet valued them at $11 billion. This means that the company earned $3.40 to the company’s earnings per share.
Uber – Alphabet’s largest stakeholder
Alphabet’s largest stake on paper is likely Uber. GV, the company’s venture capital arm, led a $258 million investment in the ride-hailing startup in 2013 when it was valued at less than $4 billion.
A recent deal led by SoftBank Group took Uber’s valuation at about $54 billion. Alphabet sold some shares in that offering, and then added some more in a legal settlement in February over self-driving cars, a transaction that valued Uber at $72 billion.
If GV had held onto that original stake of $258 million, it would have been worth almost $5 billion based on the highest valuation. But Uber’s worth has been faltering since the last year’s turmoil, which led to the ouster of Travis Kalanick as the chief executive officer.
Alphabet has not disclosed what valuation it uses for Uber or the number of shares it owns.
Alphabet invests in privately held companies through a variety of entities, including GV and Google, as well as CapitalG, a private equity fund, and Gradient Ventures, a VC fund focused on artificial intelligence.
Last month, Amazon bypassed Alphabet on the list of the world’s most valuable companies.The E-commerce giant’s stock got a rise of 2.7% showing a rise of value to $768 Billion even as alphabet fell 0.4 percent to 762.5 Billion. However, Apple is still the king with a market cap of $889. Billion.
Part of Alphabet’s drop could be attributed to consumer distrust over how big tech companies are handling their personal data, a fallout from the ongoing Facebook and Cambridge Analytical Fiasco. Facebook and Google both of them have a major stake in online advertising, and in the past Google has also faced criticism over racist ads on its video platform YouTube, not to mention public’s fears of user data being too pervasive. In the meantime, Amazon has been slowly growing as more shopping continues to grow online.
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