Google's $32 Billion for Cloud Upstart Is a Leap of Faith
It's hard to see what justifies the massive price bump Wiz won from its suitor.
The $32 billion price offered for cybersecurity firm by Alphabet is clear. The path to Google's owner earning decent returns is blurred.
Source: Bloomberg
It’s not often you see big tech firms getting pushed around. Upstart Wiz Inc. has just squeezed Google owner Alphabet Inc. to pony up $32 billion for a privately owned five-year-old cybersecurity firm. Even if the search giant can comfortably afford this deal, investors may need reassurance it hasn’t abandoned financial discipline in its pursuit of strategic ambitions in the cloud.
Alphabet tried and failed to acquire Wiz for $23 billion in July last year. At the time, Wiz’s founders told staff independence and a potential initial public offering were a better course. Securing a price around 40% higher in less than a year shows just how much Alphabet wants to own this asset.