Millionaire hedge-fund manager Michael Burry has issued a dire warning on Google’s parent company, Alphabet’s stock. The ‘Big Short’ investor explained that Google’s recent decision to issue the 100-year debt bond would spell doom for the tech giant. He said that the bond is a sign that the company’s dominance in the tech space is coming to an end.
Burry compared Alphabet’s 100-year bond to that of Motorola’s bond in 1997. For the uninformed, Motorola had also issued a 100-year bond called the ‘Century Bond’ in 1997, and it was worth $300 million. During the late 90s, Motorola was among the top 25 US companies by market cap and revenue. Just a year later, in 1998, Google was launched, and its stock GOOG made its debut in 2004.
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So why is Burry bringing this topic up now? Bury compared the timeline, explaining that Motorola lost its market value a year after it launched the 100-year debt bonds. The company became irrelevant, eventually giving way to the Finnish firm Nokia to dominate the mobile phone industry. He predicts that Google could also face a similar fate, causing its stock to plunge.
“Alphabet looking to issue a 100-year bond. The last time this happened was with Motorola in 1997, which was the last year Motorola was considered a big deal,” he said. Google’s stock was trading at $318 when Bury predicted its demise.
Alphabet Stock: Can Google’s Dominance Really End?
Google and Motorola are distinctively two different companies, and it’s like comparing apples to oranges. For instance, Motorola was manufacturing phones, and its revenues depended on sales. Google, on the other hand, controls the internet. From everything we search, eat, sleep, vacation, finance, and all personal details, it knows. A typical day for anyone on the internet starts and ends with Google. This makes Google’s stock prospects indisputable, as it’s the leader of all things on the internet. Chances of Alphabet heading south the way Motorola did are extremely slim.