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Companies raise money for big projects all the time. From issuing debt, to issuing equity.
by andsoitis 9mo ago
Companies raise money for big projects all the time. From issuing debt, to issuing equity.
- kolbe 9mo agoHe's talking specifically about Waymo's situation. Alplabet, a company who has $75bn of FCF, owns 80% of Waymo. A $16bn capital injection is meaningless to Alphabet, so he's wondering why they're going through the trouble. He raises a good point, and the answer is likely that they can run into legal issues by either under or overvaluing the company in a capital raise where they're the controlling shareholder, then the IRS or existing investors have grounds for a lawsuit (or audit). They likely just want to bring the capital raise out in the open to get a fair market value, and then they will be 90% of the capital in the raise.