Alphabet eyes $2 trillion value after blowout results

Google parent company Alphabet Inc advanced nearer to joining peers Apple Inc and Microsoft Corp in the elite $2 trillion market valuation club on Wednesday as the search giant's shares surged more than 8 percent following a blowout quarterly report.

Last trading at about $2,975, Alphabet's stock was on track for its largest one-day percentage gain in almost two years, easing concerns around owning Big Tech following a sector-wide selloff in the past few weeks.

Alphabet's stock market value peaked just above $2 trillion after the start of the trading session, and was last at $1.97 trillion. That includes class B shares that do not trade on the stock market and are held by insiders.

A close above $2 trillion would be the first ever for the Mountain View, California-based company.

"The technology sector started 2022 with some of the biggest question marks over it since the dotcom crash more than two decades ago," said Russ Mould, investment director at AJ Bell. "However, the largest and highest quality US tech names continue to deliver the answers the market wants with big earnings beats."

Shares of Wall Street's most valuable companies have soared in the past two years, driven by pandemic-led shifts in how people work and learn, even as regulators around the world scrutinize them over allegations of breaches of privacy and antitrust concerns.

At least 20 brokerages raised their price targets on Alphabet's stock after the company late on Tuesday delivered record quarterly sales that topped expectations. The median analyst price target is now $3,450, 16 percent above its current price.

Alphabet also announced a 20-to-1 stock split, which will give shareholders 19 shares for every share they hold.

Splitting stocks is a method companies use to woo investors by making them more affordable. However, some brokerages, such as Robinhood Markets, allow investors to buy fractions of shares, making the tactic less effective.

Tesla Inc and Apple split their stocks in 2000 to make their shares more appealing to mom-and-pop investors.

"The split will make the shares more accessible for retail investors and likely facilitate inclusion in the Dow Jones Industrial Average (which is somehow still share price-weighted), but it has no fundamental impact," J.P. Morgan analyst Doug Anmuth said.

Facebook parent Meta Platforms, which is set to report results on Wednesday after the bell, was last up 1.1 percent.

Adding to the rebound in tech stocks, Advanced Micro Devices Inc's shares jumped over 5 percent after its results topped Wall Street expectations. Rivals Nvidia Corp, Qualcomm Inc and Micron Technology Inc also rose.

-reuters-

Saudi Aramco prospectus flags risks, gives few details on IPO size

DUBAI - Saudi state oil giant Aramco will sell 0.5 percent of its shares to individual retail investors and the government will have a lockup period of a year on further share sales after the initial public offering, its prospectus said on Saturday.

The more than 600-page prospectus did not include details of how much of the company would be floated in total or of any commitments from anchor investors.

Sources have said the company could sell 1 to 2 percent on the Saudi stock market in what could be the world's largest listing.

Offering for the shares will begin on Nov. 17, the prospectus said.

Aramco fired the starting gun on the initial public offering (IPO) on Nov. 3 after a series of false starts. Crown Prince Mohammed bin Salman is seeking to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries.

Among the risks highlighted in the prospectus were the potential for terrorist attacks and the potential for encountering antitrust legislation, as well as the right of the Saudi government to decide maximum crude output and direct Aramco to undertake projects outside its core business.

Aramco may also change its dividend policy without prior notice to its minority shareholders, it said. For a factbox on risk factors, click

Aramco's oil facilities were targeted on Sept. 14 in unprecedented attacks that temporarily shut 5.7 million barrels per day (bpd) of output - more than 5 percent of global oil supply.

LOCKUP PERIOD

The prospectus said the government will have a "statutory lockup period" for disposing of any shares after the listing for six months, and a contractual lockup period for 12 months.

Aramco cannot list additional shares for a period of six months after trading starts, and will also be restricted from issuing additional shares for 12 months.

The offering for institutional investors will begin on Nov. 17 and end on Dec. 4, while retail investors will be able to bid for the shares from Nov. 17 to Nov. 28, the prospectus said.

"Aramco IPO is an opportunity that shouldn't be missed, the largest company in the world....holding Aramco shares is an absolute gain," a Saudi with a twitter handle named Abdulrahman wrote.

Aramco has been in talks with Gulf and Asian sovereign wealth funds and wealthy Saudi individuals to secure top investors of the IPO, but no anchor investor is yet to formally agree to a deal.

The Russia-China Investment Fund is working to attract Chinese investors for Aramco's planned IPO, the head of Russia's RDIF sovereign wealth fund said on Thursday.

Bankers have told the Saudi government that investors will likely value the company at around $1.5 trillion, below the $2 trillion valuation touted by Prince Mohammed when he first floated the idea of an IPO nearly four years ago.

Initial hopes for a 5 percent IPO on domestic and international bourses were dashed last year when the process was halted amid debate over where to list Aramco overseas.

Aramco said the timetable was delayed because it began a process to acquire a 70 percent stake in petrochemicals maker Saudi Basic Industries Corp.

The prospectus said Goldman Sachs was named as stabilizing agent for the deal.

Analysts from banks working on the Riyadh bourse have projected a wide valuation range between $1.2 trillion to $2.3 trillion.

At the top valuation of $2 billion, Aramco could potentially raise $40 billion, topping the record-breaking $25 billion raised by Chinese e-commerce giant Alibaba in 2014.

The valuation would be almost twice that of Microsoft, currently the world's most valuable listed company, and seven times that of Exxon Mobil Corp, the biggest listed oil major by market capitalization.

"Due to its size and likely free float, Aramco should be eligible for fast-track inclusion in both the FTSE and MSCI Emerging Market indices within 10 days of the IPO," said Dominic Bokor-Ingram, senior portfolio manager, frontier markets, Fiera Capital (Europe).

source: news.abs-cbn.com