Cellcast Debacle Indicates Investor Scramble to Read Google's Alphabet


In a testament to investor interest in Google/Alphabet’s next move, a tiny London firm saw its stock price spike 80 percent this week after rumors broke that it was an acquisition target.

Those rumors were quickly denied, but the buying frenzy was so intense that it still took 24 hours for the stock price to recede to normal levels.

Cellcast, which has a market cap of less than $1 million, has a technology that supports paid mobile content and interactive TV, such as polling and voting for reality shows. It also runs two mobile and over-the-top (OTT) TV channels in the U.K., Babestation and Psychic Today, and is dabbling in VoIP and VoWi-Fi. It’s a bit of a polymath.

Given Google’s interest in boosting its Nexus handset and content propositions, not to mention its Project Fi initiative, the acquisition would not be devoid of synergies—something that gave rise to a round of press speculation on Monday that Cellcast would add a new letter “C” to the Alphabet stable.

But, after watching a hockey-stick-shaped spike of its share price, the board of Cellcast emerged with a statement denying that it was, as alleged, in advanced talks with Google about a buyout—even though the market increase was quite a windfall for the firm.

Image via Shutterstock

“The board confirms there is no truth in the article and knows of no reason for the price rise,” the company said in a stock market statement.

One imagines that it was difficult to pull the trigger on that one.

The debacle points to investor uncertainty around the Internet behemoth’s new strategy. Google announced Alphabet last week, leaving some on Wall Street wondering if Google was positioning for a buying spree.  

Google co-founder Larry Page said that Alphabet will be largely invisible to consumers—it won’t be a brand, per se, but rather a holding company that owns a host of other businesses, including Google itself. Each business under the umbrella has its own CEO and management structure, allowing independence and transparency—and flexibility for Google in dabbling in new businesses. It can start something new (or buy something new), while the isolation structure keeps that experiment from contaminating the rest of the business’ financials if something goes wrong. It also added more than $27 billion to its market cap through the restructuring—plenty to play with.

So what’s next?

 “We [have done] a lot of things that seemed crazy at the time,” Page said, intimating that more crazy moves are ahead. “Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super-excited about.”

That vague strategy statement has left investors in a limbo state as they try to decipher it.  Wall Street firms and analysts have varied widely on their stock ratings—everything from “overweight” (Morgan Stanley) to “buy” (Zacks). It’s unlikely that Cellcast will be the only red herring as the situation continues to shake out.

Edited by Dominick Sorrentino
Get stories like this delivered straight to your inbox. [Free eNews Subscription]

TechZone360 Contributor

Related Articles

What Is Attribute Based Access Control?

By: Contributing Writer    12/5/2023

Attribute-Based Access Control (ABAC) represents a paradigm shift in managing access rights within complex and dynamic IT environments. Unlike traditi…

Read More

Raising Value: The Strategic Gains of Embracing Bundled Result

By: Contributing Writer    12/4/2023

Where the concept of value is not just a price tag but a carefully crafted now. In a world brimming with options, the art of planned bundling has aris…

Read More

Tech Innovation in iGaming

By: Contributing Writer    11/29/2023

iGaming is one of the fastest growing industries on the internet. For those who may not be aware, iGaming refers to online casinos, online slots, poke…

Read More

8 Underrated Features of Your Mobile Device You Probably Didn't Know About

By: Contributing Writer    11/21/2023

It is easy to get lost in all the new phone releases when multiple happen yearly. Consequently, most new functions go unnoticed because people do not …

Read More

Navigating the Launch: A Step-by-Step Guide to Bringing Your Product to Market

By: Contributing Writer    11/15/2023

Embarking on the journey to bring a new product into the marketplace is an exhilarating adventure that blends the thrill of innovation with the meticu…

Read More