Sunday, 26 July 2015
Apple's spaceship and other designer HQs
It's been an interesting week in technology with Amazon and Google posting blowout earnings and Apple missing estimates. The three technology companies are also designing their own buildings with a case of headquarter (HQ) fever. As a general rule I tend to worry when a company designs their own HQ. It suggests management have too much time and money. It tends to mark a top in the stock. Apple is building what some are calling an Ispaceship/UFO. It will be the most expensive building ever constructed in the US housing over 13,000 employees. Like most Apple products everything will be curved no seams, gaps, paintbrush strokes or edges. It is estimated to have nearly 6 kilometers of glass. The cost has been an issue especially when Apple was not returning cash but with their large dividends and buybacks shareholders are less upset at the $5 billion spend on the campus. When you have a $200 billion cash balance like Apple what's $5 billion to them? The building will also house a 1,000 seat underground auditorium where Apple will likely showcase their new products. The "UFO" will be completed next year.
Amazon is also thinking big with plans for a biosphere in the city. Each bubble will offer five floors of flexible work spaces within 25-35 meter domed structures. The spheres will keep the temperature regulated between 20-22 degrees and will have a number of different botantical zones.
Meanwhile Google's new campus seems downright plain but the buildings will act similar to Amazon's biosphere. The translucence canopies control the climate inside but still let in light and air. It is the roof of the future the translucent enclosure can blur what is inside and what is outside.
I'm personally looking forward to taking off with the Apple spaceship when it is finished next year. While these designs are cool designer HQ's have been contrarian indicators in the past. We will see what happens but I still believe as stocks Google and Apple are too cheap given their growth prospects.
Decisive has a long position in Apple (AAPL) and Google (GOOG) stock. The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.