g-is-for-google

When we reported yesterday that Alphabet was planning to buy back $5,099,019,513.59 of its own stock, you may have wondered how the company came up with such a strangely specific number.

RBC Capital’s Mark Mahaney actually figured out the answer during the earnings call – appropriately enough, by Googling the number. The alphabet has 26 letters, and the square root of 26 is 5.09901951359. Multiply that by a billion and, yep, you get $5,099,019,513.59.

Alphabet financial chief Ruth Porat reassured analysts that the number wasn’t merely arrived at by whimsy: the company first figured out what made financial sense and later decided to have a little fun by slightly modifying the $5B number it came up with.

The WSJ notes that it’s not the first time Google has had this kind of fun with formulae.

The name Google is a play on googol, which is the number 1 followed by a hundred zeroes. When it first filed to go public, it said it planned to raise $2,718,281,828, a billion times the value of “e,” an important mathematical concept in calculus.

Nearly a year later, it said it was going to sell 14.2 million shares of stock. Well, not exactly 14.2 million, but 14,159,265, the numbers that follow the decimal in pi. And when the company made a move to buy Nortel Network patents, one of its bids was actually “pi” — around $3.14 billion. (Its other bids were plays on numbers, too; Google lost the bid.)

The market appears to approve of Google’s numbers: at the time of writing, the stock is up more than 10% in pre-market trading.

 

 

 

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