Ed Lin
Alphabet stock has been surging, along with peers in the Magnificent Seven, and the company has increased stakes in some of its equity investments.
The parent of YouTube and Google more than tripled its stake in GitLab stock, and added more Prime Medicine stock in the first quarter.
Alphabet disclosed the transactions, among others, in a form it filed with the Securities and Exchange Commission. The company didn't offer any comment on the stock trades.
GitLab and Prime Medicine stocks underperformed both the market and Alphabet stock in the first quarter; so far in the second, they still are.
Alphabet bought 7.1 million more GitLab shares to lift its investment to 9.8 million shares of the provider of cloud-based software-development tools. Before the purchase, and including Alphabet's stake of 8.9 million supervoting class B GitLab shares, Alphabet held 22.2% voting power in GitLab.
GitLab provided disappointing guidance in early March, sending shares tumbling. The outlook outweighed a strong fiscal-fourth-quarter report.
GitLab stock fell 7.4% in the first quarter, while the S&P 500 index rose 10% in the first quarter, and Alphabet class A shares gained 8%. So far in the second quarter, GitLab stock is down 9.3%, while the index is about flat, and Alphabet stock has tacked on 12%.
Prime Medicine dropped 21% in the first quarter. The stock is down nearly 20% so far in the second quarter.
The biotech, which focuses on gene-editing therapies, received gross proceeds of $161 million from a February offering of stock and prefunded warrants that priced shares at $6.25 each.
Alphabet bought 3.2 million more Prime Medicine shares to lift its investment to 15.1 million shares, a 12.6% stake.
Alphabet's Freshworks stake seemed to surge in the first quarter, but the overall share ownership in the provider of software for IT services management and customer support didn't change. Alphabet ended the first quarter with 12.3 million Freshworks shares -- 8.3 million more than at the end of the fourth quarter. But companies aren't required to disclose quarterly ownership in shares that don't trade publicly.
During the first quarter, Alphabet had converted 8.3 million supervoting class B Freshworks shares, which don't trade publicly, into 8.3 million of the publicly traded Freshworks shares, accounting for the change. Class B shares carry 10 votes each, while the conventional shares carry one each. Alphabet continues to own 8.3 million class B shares. After the conversion, Alphabet now has 9.4% voting power in Freshworks, down from 12.2%.
Freshworks stock dropped 22% in the first quarter. So far in the second quarter, shares have slumped about 25%.
On May 1, Freshworks provided disappointing guidance that overshadowed a strong first-quarter report. The company also replaced founder and CEO Girish Mathrubootham with President Dennis Woodside. Mathrubootham was named executive chairman.
Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
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(END) Dow Jones Newswires
May 18, 2024 06:27 ET (10:27 GMT)
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