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Google's spending spree rattles Wall Street
Alphabet, the parent company of Google, racked up $7.7 billion in capital expenditures for the first three months of 2018 on everything from real estate to undersea cables.
The company reported strong growth in sales and profit for the quarter on Monday, fueled by the strength of its advertising business and helped by a lower tax rate. But its staggering investments appear to be rattling Wall Street. Google's stock fell as much as 5% in early trading Tuesday.
"The big story from the results was the significant rise in expenses," Brian Wieser, an analyst with Pivotal Research, wrote in an investor note Monday night.
Alphabet spent $2.4 billion in March to buy Cheslea Market in Manhattan to expand its office space in New York City. The company also said it invested in data centers, production equipment and undersea cables.
Also at Bloomberg and Reuters.
(Score: 2) by TheReaperD on Thursday April 26 2018, @12:54AM
Wall Street's obsession with expenditures borders between irrational paranoia and self-abuse. It's realistic in modern Wall Street to have a company report that they made the biggest profit of any company in history but, because their capital expenditures increased by 2%, have their stock drop 5%. In fact, I believe this kind of scenario happened to Apple. Wall Street insiders would see this as a proper response and that the company deserves to be punished, up to their executives being fired, because of their expenditure increase. Note, in this scenario, I haven't even brought up why the expenditures increased because Wall Street doesn't care; as for as they're concerned all expenditures are bad expenditures.
Ad eundum quo nemo ante iit