Google share price rally could stall after Fitbit deal faces EU probe

Alphabet (Google) shares have skyrocketed since the initial Covid-19 stock market crash, but its stock stuttered on Thursday and could continue to do so after its Fitbit deal draws scrutiny from EU antitrust probe.

Alphabet (Google) shares have skyrocketed since the initial Covid-19 market crash, but its stock stuttered on Thursday and could continue to do so after its Fitbit deal draws scrutiny from EU antitrust authorities.

Since hitting a year-low of $1054.13 on 23 March due to the coronavirus outbreak, Google has seen its share price rebound aggressively, climbing 43% since the downturn and up more than 10% year-to-date.

However, that rally risks stalling as a consequence of the EU antitrust investigation into its deal with the wearable tech company.

Google is trading at $1523 per share at the time of publication.

EU antitrust probe could scupper Google’s $2.1 billion Fitbit deal

Google’s $2.1 billion bid for the fitness tracker maker is going to face a full-scale EU antitrust probe next week, according to a recent report by MLex.

In an attempt to quell EU antitrust concerns, Google said that it would not use Fitbit’s health data to help it improve its AdSense software which is used to target consumers online with relevant advertising. However, the promise appears insufficient for EU regulators.

The deal, which was announced back in November last year, will allow Google to compete with tech giants like Apple and Samsung within the wearable tech market, which is worth around $52 billion (£39.8 billion) in 2020.

‘The wearables space is crowded, and we believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, benefiting consumers and making the next generation of devices better and more affordable,’ a Google spokeswoman said.

The EU Commission will launch its full-scale investigation into the deal after it has completed its preliminary review on 4 August.

Google plans to keep staff working from home until next summer

The vast majority of Google’s 200,000 staff around the globe have been told to continue working remotely until July 2021, with coronavirus cases resurfacing in North America and Europe.

‘To give employees the ability to plan ahead, we are extending our global voluntary work from home option through June 30, 2021, for roles that don't need to be in the office,’ Google CEO Sundar Pichai wrote in an email to employees.

‘I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months,’ he added.

Twitter and Square CEO Jack Dorsey reiterated similar sentiments to his employees earlier this month, telling workers that they are free to continue working remotely if they wish.

'We've been very thoughtful in how we've approached this from the time we were one of the first companies to move to a work-from-home model,' a Twitter spokesperson said at the time.

'We'll continue to be, and we'll continue to put the safety of our people and communities first.'

How to trade stocks with IG

Looking to trade the Alphabet and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Alphabet’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.