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Brian Feroldi

Sep 27, 2020 • 8 tweets • 2 min read • Read on X

A brief history of $GOOG

1995: Larry Page & Sergey Brin meet at Stanford
1996: Build search engine called 'Backrub' in dorm room
1997: Change name to Google, misspelling "googol"
1998: Move into Susan Wojcicki's garage
1998: Sun co-founder Andy Bechtolsheim invests $100k

1999: Raise $25 MM from Kleiner Perkins / Sequoia
2000: Launch AdWords
2000: Default search engine for Yahoo!
2001: Hire Eric Schmidt as CEO
2002: Launch Google News
2004: IPO at $85, raise $1.67 BB
2004: $25 billion market cap
2004: Move into Googleplex

2004: Launch Gmail
2005: Launch Google Earth
2005: $100 BB market cap
2005: Launch Google Maps
2006: Acquire YouTube for $1.65 BB
2006: Launch Google Docs
2007: Acquire DoubleClick for $3.1 BB
2007: Launch AdSense for Mobile
2008: Launch Chrome
2009: Launch Waymo

2010: Launch first Android phone
2010: Launch Google Fiber
2010: Launch think tank Jigsaw
2010: Launch R&D subsidiary Google X
2011: Launch Chromebook
2011: Launch Google+
2011: Launch Google Wallet
2011: 1 billion monthly users
2011: Acquire Motorola Mobility for $12.5 BB

2011: Launch Project Loon
2012: Launch drone subsidiary Wing
2013: Acquire Waze for $966 MM
2013: Launch healthcare company Calico
2013: Launch private equity subsidiary CapitalG
2014: Acquire DeepMind for $400 MM

2015: Launch life sciences subsidiary Verily
2015: Launch subsidiary Sidewalk Labs
2015: Change name to Alphabet
2015: Split shares into $GOOG and $GOOGL
2015: Name Sundar Pichai CEO
2016: $500 billion market cap
2017: 100% renewable energy
2019: Launch Stadia

2020: $1 trillion market cap

Currenly have 9 (!!!) products with 1 billion+ users:

Android
Chrome
Drive
Gmail
Maps
Photos
Play
Search
YouTube

TTM Revenue: $166 billion
TTM Profits: $31.6 billion
Return since IPO: 2,770%

Larry Page: $62 billion net worth (#9 in world)
Sergey Brin: $60 billion net worth (#11 in world)
Eric Schmidt: $17 billion net worth

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More from @BrianFeroldi

Brian Feroldi

@BrianFeroldi

Aug 16

WACC Cheat Sheet

What is the Weighted Average Cost of Capital?

Here's a quick primer:

WACC is the average after-tax expense of capital for a company from all of its sources.

This includes common stock, preferred stock, bonds, and other hybrid debt & equity instruments.

WACC is the mean rate a company pays to fund its operations.

WACC = [(E/V) x Re] + [(D/V) x Rd x (1 - Tc)]

E = Market value of the firm’s equity
D = Market value of the firm’s debt
V = E + D
Re = Cost of equity
Rd = Cost of debt
Tc = Corporate tax rate

WACC is a sum of the weighting of each capital source

Read 6 tweets

Brian Feroldi

@BrianFeroldi

Jul 3

If you pick stocks, you MUST learn how to analyze a cash flow statement.

Here's how to do it in less than 2 minutes:

The Cash Flow Statement shows how cash moves in and out of a company over a period of time.

Its purpose is to track cash movement through a business.

The Cash Flow Statement uses CASH accounting.

This method only records transactions when money goes in or out of an account.

This differs from ACCRUAL accounting, the accounting method used on the Income Statement and Balance Sheet.

Read 10 tweets

Brian Feroldi

@BrianFeroldi

Jul 2

How to analyze a Balance Sheet in less than 2 minutes:

The balance sheet is one of the three major financial statements.

It shows a company’s:
▪️Assets: What it owns
▪️Liabilities: What it owes
▪️Shareholders Equity: It's net worth

At a fixed point in time

That “at a point in time” part is key!

A balance sheet is a SNAPSHOT of a company’s net worth.

It is measured at the end of a quarter/year.

Read 11 tweets

Brian Feroldi

@BrianFeroldi

Jun 21

Warren Buffett's favorite way to measure profit isn't Net Income or Free Cash Flow.

It's Owner's Earnings.

What is it? How to does it work?

In this thread, I'll walk you through the calculation:

Imagine that you're opening a coffee shop.

You spend $100k on furniture & fixtures that will last 10 years.
You spend $60k on coffee equipment that will last 3 years.

Here are your total annual operating costs:

You make $1 million in revenue, so here's your income statement:

Revenue: $1,000k
Expenses: $450k
Pre-tax income: $550k
Taxes: $110k
Net Income: $440K

If you started with $105K in cash, how much do you have now?

Read 11 tweets

Brian Feroldi

@BrianFeroldi

Jun 17

If you invest, you MUST understand accounting.

This thread will walk you through the Income Statements, visually:

An Income Statement is a *record* of how much money a business made (or lost) during a particular period of time -- eg, a quarter or a year.

The formula is: Revenues - Costs = Profits

Here's an example using Starbucks's income statement:

The Income Statements also contain a few other numbers that interest investors, including:

Gross Profits, Gross Margin, EBITDA, Operating Profits, Operating Margin, Earnings Per Share, etc.

Read 12 tweets