Following a great run in July and the first week of August, the stock market is calming down after days of record-setting highs amid earnings reports and lots of political drama. August is usually the quietest month for the stock market as most people take their vacations. Even the latest threats coming from North Korea have not deterred the markets significantly, as equities remained mostly stable despite some very short-term volatility.
TrackStar, the official newsletter of Investing Channel’s Intuition, has compiled a list of the 20 most searched tickers among financial advisors, which showed that between August 6 and August 12, the focus remained on the last companies that disclosed their financial results, but the most searched one was Alphabet Inc. (NASDAQ:GOOG), which was in the middle of a major public relations incident involving sexism at workplace.
In fact, Alphabet Inc. (NASDAQ:GOOG) was not only the most searched ticker by financial advisors, but by the general public in general. On Friday, August 11, a male software engineer posted a 10-page memo titles “Google’s Ideological Echo Chamber” on the company’s internal online board. The memo, also called a “manifesto” argued that the differences between men and women in engineering and leadership were not due to social biases, but because of the biological differences between the two groups. The story got a lot of traction among Google employees and was leaked to the media, sparking a public outrage at the beginning of the week.
The memo authored by James Damore stated, among other things, that women were more neurotic and less interested in high-stress jobs, like engineering. Further, the author called for Alphabet to scrap its programs aimed at promoting women in tech.
Even though Google fired Mr. Damore on Monday, the memo and its implications where still discussed throughout the week. From an analysis of the so-called scientific evidence that was presented in the memo, which was at best irrelevant to the case he was trying to make, since studies analyze populations, while companies hire individuals, to the overall gender balance among tech companies. Even though Sundar Pichai, Google’s chief executive, has managed to create one of the most gender-balanced executive boards, which contains six women and seven men, the proportion of women in engineering and other management area is still hovering at around 20%.
The firing of Mr. Damore also created a firestorm about the free speech in workplace. It was a particularly important issue because Google is praising itself with being a company that endorses free speech and allows employees to speak freely on various topics. However, Mr. Damore was fired because it affected many of Google’s employees, with some women even saying that they would have considered leaving their jobs if the company hadn’t taken any action. In an internal email Mr. Pichai wrote that even though he supports the right of employees to speak up, “[…] co-workers shouldn’t have to worry that each time they open their mouths to speak in a meeting they have to prove that they are not like the memo states, being ‘agreeable’ rather than ‘assertive,’ showing a ‘lower stress tolerance,’ or being ‘neurotic.’”
Mr. Damore’s reaction to his firing was to accuse the company of liberal bias and he has embarked on a media tour to complain about how intolerant Google is of people that don’t share the company’s views. While the majority of Google employees and the majority of the public criticized the memo and the stereotypical assumptions presented in it, Damore also found a lot of supporters in the alt-right circles, where he has become a sort of hero and martyr. Since the incident happened, Damore has given numerous interviews to alt-right vloggers and websites, was praised by them and even received job offers. A lot of his supporters took to social media to express their frustration about the suppression of free speech at Google and many even called for boycotting the company and its services.
Despite the firestorm, the incident is unlikely to have any major effects on Google and Alphabet Inc. (NASDAQ:GOOG)’s performance. The tech giant’s liberal views have been known to everybody, including alt-right websites and vloggers, who use YouTube as the main platform to spread their message. They will continue to take advantage of Google and YouTube services, because they are crucial to the promotion of their message and to their own businesses.
Calls for boycott are also not something unfamiliar to Alphabet Inc. (NASDAQ:GOOG) and to many other Silicon Valley companies, including Facebook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR), and Paypal Holdings Inc (NASDAQ:PYPL). There even have been attempts at creating similar products by some alt-right supporters, some of which, though successful, very small to put even a dent in the profits of the tech giants.
Though unrelated to the whole memo incident, but, in a way, a confirmation that it doesn’t pose any risk for Alphabet Inc (NASDAQ:GOOG), on August 7, MKM Partners’ analyst Rob Sanderson raised his price target on Alphabet Inc (NASDAQ:GOOG)’s stock to $1,210 from $1,170, maintaining a ‘Buy’ rating. In his note, Sanderson cited higher growth estimates for the company’s Google division.