From Nasdaq: 2025-05-03 07:19:00

The recent U.S. District Court ruling found Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) guilty of operating an illegal monopoly in digital advertising. While this could lead to a breakup, it might actually create more shareholder value by putting businesses under separate management teams and diversifying revenue sources.

Alphabet plans to appeal the ruling, so a breakup isn’t imminent. However, the company has previously divested businesses deemed unfit for its model. Despite digital advertising’s dominance in revenue, diversification efforts are ongoing. The potential breakup could impact profitability and the tech giant’s financial outlook.

Investors should note that Alphabet encompasses various businesses, some unrelated to its ad empire. Smaller entities could grow faster post-breakup, potentially unlocking shareholder value. However, Alphabet’s lack of financial transparency for certain units complicates valuation and investor insight, raising questions about potential market value post-breakup.

History shows that company breakups can benefit shareholders, driving significant value growth. While a forced breakup isn’t guaranteed for Alphabet, it could lead to long-term shareholder gains. Despite initial challenges, a breakup may unlock shareholder value and provide direct investment opportunities in individual businesses like Waymo or CapitalG.

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Read more at Nasdaq: Why Alphabet’s Investors Should Root for Its Breakup