Inc (CRCM) Soars On Google Inc (GOOG) Investment

Care.comChart via Google Finance Inc (NYSE:CRCM) is soaring this morning up about 39 percent at the time of this writing – why? Google Inc. (NASDAQ:GOOGL) just made a big capital injection into the family care company. Below is that the analysts are saying about the latest news. Inc

Stifel opines:

Yesterday, announced that Google Capital made a $46.35mm investment in the company (versus the company’s market capitalization of $268.4mm at the close). The transaction marks Google Capital’s first investment in a public company and makes it’s largest shareholder. A portion of the proceeds will be used to repurchase $30.5mm worth of shares from Matrix partners. In addition, Laela Sturdy, a Partner at Google Capital, will gain a seat on’s Board of Directors. We view the investment as a vote of confidence in the platform. has executed  well over the last year achieving profitability ahead of expectations and aims to sustain profitability going forward.

Morgan Stanley

What does this mean for CRCM? Google Capital’s infusion should enable CRCM to invest to grow their business, while CRCM also gains access to Google Capital’s resources/expertise. We continue to have concerns about CRCM’s high churn rate, short customer life-cycle, and required high
marketing intensity. As such, it will be important to monitor whether Google Capital and the addition of Laela Sturdy can improve’s forward growth trajectory.

JPMorgan Chase

Economics of the deal. The $46.35 million investment at a $10.50 conversion price equates to ~4.4M shares to Google Capital, which when offset by the 3.7M buyback nets to an incremental 700k shares outstanding. By our math, this will put Google Capital’s initial stake at ~13% and will be immediately dilutive to EPS by ~2%. Over the 7-year period, our math shows Google Capital’s stake increasing to ~20% of total equity and resulting in slightly higher dilution of ~8%.


For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

About the Author

Sheeraz Raza
Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)

Be the first to comment on " Inc (CRCM) Soars On Google Inc (GOOG) Investment"

Leave a comment

Your email address will not be published.