August Markets Report
GOOG, CRWD, TSLA, UNH
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Google Sells Remaining Stake in Crowdstrike
A filing revealed that Alphabet’s (GOOG) growth fund, CapitalG sold its remaining stake in Crowdstrike (CRWD), amounting to 427,895 shares which are worth nearly $180 million at today’s value.
Crowdstrike, a cybersecurity company specializing in endpoint security, provides services that defend against cyberattacks to companies. Headquartered in Austin, Texas, the company has experienced rapid growth in recent years, establishing a dominant position in the sector.
Shares are up 20.52% YTD, however they have slid roughly 18% in the last two months.
Gene Frantz, a partner of CapitalG noted that the decision to offload Crowdstrike did not reflect a wane in confidence, rather the decision was due to portfolio rebalancing at the firm.
Tesla $Multi-Billion Package
On August 3rd, Tesla (TSLA), one of the largest EV companies in the world, announced the approval of a 96 million share pay package for the company’s CEO, Elon Musk. The total value of package at the time of announcement was valued at $29 billion, but is now worth $31.5 billion based the current market price (as of Aug 19th).
The pay package comes after the initial $56 billion package from 2018 was blocked by a judge in January 2024. Following unsuccessful attempts to revive the original package, the lawyers who argued the package was illegal demanded an astounding $5.6 billion in compensation and fees.
In a letter to shareholders, Tesla stated that retaining Elon Musk is “more important than ever before” and that “[the] award will incentivize Elon to remain at Tesla”. The company also noted the new package would be forfeited if the original 2018 package was reinstated, ultimately to prevent any ‘double-dipping’ from occurring.
EXTRA: What is “Dilution”
Dilution may occur when new shares are issued by a company. These new shares increase the total shares that exist (total shares outstanding), reducing each existing stakeholder’s percent ownership. Stock based compensation (SBC) typically involved the issuing (printing) of new shares.
- For example, let’s say company ABC has 100 million total outstanding shares. They then issue 5 million new shares, bringing the total share counts to 105 million
- If a investor previously held 1 million shares..
- They would have previously owned 1% of the company (1 million / 100 million)
- But now they only own 0.952% of the company (1 million / 105 million)
- So their percent ownership in company ABC is being “diluted”
Buffett Loads Up on United Health
Shares of United Health Group (UNH) were up 11.98% on August 15th, in their best day in over a decade.
The recent jump provides a breath of fresh air for the company, whose shares have faced numerous headwinds in the past months, over struggles with rising medical costs. At one point, the stock was down 61.39% from an all-time high.
The reason for the sudden jump – Berkshire Hathaway (BRK.B), a conglomerate holding company known for its founder Warren Buffet, announced in a 13-F filing on August 14th that it was holding a stake in UNH valued at $1.6 billion.
The Oracle of Omaha (Buffet) once previously was an investor in UNH, initially investing in 2006. However, these shares were eventually sold off by 2010.
More segments are on the way, please check back later!
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