By Angela Harmantas
Google’s surprise restructuring, Telus’s CEO’s surprise resignation and Buffett’s surprise acquisition – here’s what you need to know today:
Google shocked the business world on Monday evening (and many of its own shareholders, evidently) by announcing that it was creating a new holding company, Alphabet Inc., to better serve its bread and butter advertising business while streamlining its fledgling new technologies. With former Google CEO Larry Page at the helm of Alphabet, Google executive SundarPinchai will take over the reins of Google Inc. and Alphabet subsidiaries such as Nest, Google X and Life Sciences will each have their own CEO reporting to Page. I wonder if this is a move that will open up the possibilities of spinoffs, and I’m excited about the future of the technology giant.
Here’s something you don’t see often: Telus CEO Joe Natale is stepping down after only 14 months on the job because he doesn’t want to move his family out to British Columbia, where the mobile company has its headquarters. Now, it’s nice to see an executive prioritize the needs of his family, but if you’re Kevin O’Leary, Natale’s resignation is actually due to underperformance.As O’Leary said on BNN yesterday, “It’s almost humorous to read ‘for family reasons’ in the exit of a CFO, CTO, CIO or even a board member for that matter. It’s code for “I just go whacked,” and usually because I didn’t perform.” I’m not sure I totally buy that line of thinking but admittedly, it is strange to see a CEO putting family first in the cutthroat business world.
Warren Buffett’s Berkshire Hathaway made a mammoth move on Monday by acquiring aerospace and industrial company Precision Castparts in a US$32.36 billion deal, the biggest of Buffett’s storied career. Precision has struggled in recent months with the fall in crude and natural gas prices, but Buffett and BH are thinking longer term with this acquisition. Even so, I’m in agreement with analysts who feel that the price tag might be too high for a company whose business is inherently cyclical, but Buffett wouldn’t be where he is today by making the obvious deals. What do you think?
Have a comment or suggestion? I’d love to hear from you! Contact me at angela@smallcappower.com or on Twitter: @aharmantas.
