Google is restructuring. They will be giving themselves a parent company, called “Alphabet,” and there’s a ton of buzz about it right now in the business and financial worlds. As CEO Larry Page said, Google is doing great right now, but they can do even better. Alphabet allows Google to keep doing what they do, but also incorporates other companies, many of which are focused on health technologies. Calico and Life Sciences are the two biggest examples here. Perhaps the biggest move within the overall design is that Page will be taking a bigger role in overseeing, and a new CEO will come in for Google. Page has recommended that this person be Sundar Pichai. He’s already done a lot to work with Google, and management sees this as a natural progression.
Alphabet is a big stretch for Google and a big risk. However, Google hasn’t ever really been a conventional company. They do a lot of things people don’t see besides their web-based activities, and there is a ton of potential for profits here. Some of these have been in the news recently, such as the driverless cars that have been being developed. Alphabet seems like an attempt to differentiate these products in order to help the different branches focus just on what they are doing and providing better services there. These are all things that Google has been doing for years already, now the efforts are being delegated in a more official capacity with clearly different corporate frameworks.
It will be interesting to see the market’s immediate reaction to this announcement, but it seems like it will definitely be a positive one. If Google keeps posting the numbers that they have been, there’s no doubt that Alphabet will be a winning move by them. It might take a year or so to get there, but it will pay off. Short term traders need to do their own analysis before proceeding, and the moves that they make will depend upon the timeframes that they are looking at. Binary options traders especially need to be cautious here because they will be locked into the timeframes and expiration dates that they choose. Still, if the general momentum from this move is upward–and it should be–it stands to reason that short term trades should mirror this. The only question is when to begin. For the answer to this, you need to monitor the markets and trader sentiment.
The fact is though, transitions can be a difficult thing for investors to embrace, and the result of this is often less money going into a company. For Google, the coffers are certainly big enough that this will not have a big impact upon them, but it could drive their stock price down for a while. It’s far too early to tell how this will play out, but there’s no doubt that opportunity will come of it. Even if prices drop right away, there’s now a chance for buying a strong stock at a lower than realistic price. If it stays down for a while, binary put options could be helpful for squeaking small profits until the company finds its groove in stock pricing again. This is a change for sure, but it’s also a big money making opportunity if you pay attention to what is going on.
Do note that Google’s stock will be changing. Those that currently own Google will now be shareholders of Alphabet. The stock ownership isn’t changing, just the name of the company in which shareholders own. It sounds far more complicated than it actually is. Google, which currently trades on the NASDAQ as GOOG and GOOGL, will keep those call letters the same.