What’s next for Apple, Google, and Google?
Apple Inc. AAPL 0.19% Google Inc. GOOG 0.36% Microsoft Corp. MSFT 0.37% Facebook Inc. FB 0.41% Amazon.com Inc. AMZN 0.42% Netflix Inc. NFLX 0.47% Facebook is seeking a $20 billion federal bailout, while Google and Facebook are asking for $1.9 billion and $3 billion, respectively, to help them recover from the crisis, according to people familiar with the matter.
The rescue plan would require the government to provide the companies with more than $2 billion, or nearly half of the company’s cash, the people said.
The companies also would need to pay back more than 40% of the loans they took out to buy the companies, these people said, requesting anonymity because they were not authorized to speak publicly.
The companies could be forced to raise money from investors to fund the plan.
Apple, which already has more than 3 billion shares outstanding, has not announced a plan to raise the money.
Google and Facebook also are trying to sell their companies, according the people familiar, which would help the companies recoup more than half of their loans.
Google is in talks with hedge funds to sell off some of its stock to help pay for the rescue, these sources said.
Facebook is still discussing with other investors about selling some of the shares.
The two companies have agreed to work together to help each other, these two people said Monday.
The plan could still change if other companies in the industry, such as Intel Corp. INTC 0.27% and Cisco Systems Inc. CSCO 0.44% raise additional capital, the sources said, adding that it is too early to speculate.
Google was the first to report on Monday that it has reached an agreement to purchase a controlling stake in its rival Facebook.
Facebook and Google are both based in Mountain View, California.
Facebook has been negotiating with Facebook’s board of directors for more than two months, according a person familiar with those discussions.
Google declined to comment.
Google, Google’s parent company, said Monday that the company had reached a $1 billion deal with Microsoft Corp., a deal that is contingent on the two companies sharing more than a quarter of Facebook’s $1 trillion market value.
The deal would give Facebook the largest shareholder in Facebook, which shares are trading for about $62.50, according as of Monday afternoon.
The deal is part of a larger corporate restructuring deal that Microsoft and Google agreed to last year, after a public fight between the two that pitted the tech companies against one another.
Microsoft was the only major tech company to announce it was looking to sell a significant portion of its shares in Microsoft Corp..
Microsoft shares rose 4.9% Monday after the announcement.
Apple’s share price rose 0.6%.