The author argues OpenAI's ChatGPT ads will divert advertising spend from Google and is using long-dated puts on Alphabet as a short position.
Unpriced research observations (excluded from Calls and Returns):
GOOGL — SHORT The author claims ChatGPT ads represent a structural threat to Google's advertising revenue because advertisers can diversify away from Google's declining ROI and misleading conversion metrics. OpenAI's ad rollout to free and cheaper ChatGPT users is the catalyst, and when expanded to all users, tens of billions of dollars in ad spend will shift from Google to ChatGPT. The author uses long-dated puts on Alphabet (GOOG/GOOGL) as a short position; returns would track the downside of Alphabet stock, not option P&L. ambiguous_option_contract
This is the big catalyst that needed to happen for GOOG earnings to finally take a hit, and what I was waiting for before I begin a short position in the stock.