Google's stock takes a dump

[theMerciless1]

very good explanations from DJ and UMB. I'm def learning something here.

however, the "value" of the stock doesnt seem like it would be too relevant to 99% of the company's investors because probably 1% of all historical investors of a certain stock will own it when to company ends.
so that may be a way of determining value but it seems to almost be inconsequential to most investors.

Most investors aren't interested in dividends, no.

But what they are doing implicitly by using things such as EPS or marketshare is building a proxy for future dividends.

I realize my argument is more academic, but nevertheless, in a world without dividends, no stock has value.

[ur my bitch]

DJ FC.....thanks for clearing up where you're coming from on your dividend theory. I can see your point, and although it is very academic, it does makes sense from the stand point when looking at present value of dividends, etc. However, like you said, money is made on speculation.

Also, not all companies come to an end via liquidation. What about mergers/takeovers? That means regardless of dividends, a companies fiscal performance means a lot. low debt, high cash = great takeover target. Again, being a bride in a take over situation will mean a price increase typically. Also, like you said, speculation of financial performance.

Now, investors do care about dividends. It does help performance. Plain Vanilla funds are usually measured against a benchmark. Also, Fund of Funds measure their constituants by performance against a benchmark. so dividends can help, especially if the underlying stock price is appreciating. Also, hedge funds are measured by total performance. so, dividends can help because they get reinvested. Example (DJ FC I kow you understand this, but otehrs may not)...I owned 100 shares of a high dividend paying stock, 15% yield. After 6 months I now own 113 shares or something like that, because I re-invest the dividends into automatic stock purchases. Now, the price has increased about $3 a share since my purchace, so normally that would be a $300 return in 6 months or so. But, because of the dividends, I now have 113 shares, so my total $ return is $703 because of the dividends.

So, dividends do pay off.

[ur my bitch]

DJ FC...do you plan to have a career in the investment arena?

It's hard to say. I was considering law school, but we'll see how well this summer treats me (I applied for an internship/summer classes in London)

[ur my bitch]

Google-GOOG shares trading up after positive comments from EXPE's conference call
Thomson Financial. All rights reserved.
Last Updated: 12:51 PM ET Feb 16, 2006

Shares of Google are trading up over 5% today after Expedia's positive comments on its click-ad business with Google. Expedia said "they (Google) do an excellent job with us" and "the amount of business that we do with them grows year-over-year fairly significantly." Expedia went on to say that Google is a "great partner of ours" and that they (Expedia) "are certainly a very big client." This may be seen as a positive as Blue Nile (NILE) and FTD Group, Inc. (FTD) have pulled back on their use of click-ad.


GOOG-US,USD,NORM 366.46 +24.08 +7.03%

I know this is apples to oranges, but interesting nevertheless.


Google Market Cap:
101,189 (million)


GDP of New Zealand:
96,678 (million)


And a few more GDPs (in millions):

43Hungary100,371
44Colombia97,389
45New Zealand96,678
46Chile94,100
47Philippines84,835
48Algeria84,817
49Egypt77,032
50Romania71,323
51Nigeria71,318
52Peru68,635
53Ukraine65,039
54Bangladesh58,305
55Kuwait51,804
56Morocco50,031
57Vietnam43,891
58Slovakia41,091
59Kazakhstan40,754
60Croatia34,309
61Slovenia32,226
62Luxembourg31,695
63Ecuador30,300
64Tunisia28,501
65Qatar28,451
66Libya28,025
67Guatemala25,959
68Oman24,824
69Serbia and Montenegro23,99
670Bulgaria23,773
71Syria23,745
72Belarus22,888
73Lithuania22,261
74Lebanon21,768
75Sudan21,585
76Sri Lanka20,718
77Angola19,523
78Dominican Republic19,445
79Costa Rica18,511
80Kenya16,088
81Cameroon15,865
82El Salvador15,802
83Côte d'Ivoire15,495
84Cyprus15,419
85Turkmenistan13,982
86Panama13,793
87Latvia13,623
88Uruguay13,267
89Yemen13,062
90Iceland12,258
91Trinidad and Tobago12,019
92Jordan11,515
93Estonia11,447
94Tanzania11,307
95Bahrain11,010
96Uzbekistan9,720
97Botswana9,065
98Ghana8,854
99Bolivia8,784
100Jamaica8,677
101Azerbaijan8,537
102Bosnia and Herzegovina8,262
103Ethiopia8,005
104Senegal7,637
105Albania7,595
106Honduras7,429
107Gabon7,226
108Myanmar6,891
109Uganda6,806
110Paraguay6,718
111Democratic Republic of the Congo6,505
112Nepal6,359
113Mozambique6,086
114Mauritius5,907
115Zimbabwe5,762
116The Bahamas5,718
117Brunei5,692
118Zambia5,409
119Afghanistan5,392[1]
120Malta5,369
121Burkina Faso5,110
122Mali4,937
123Cambodia4,879
124Republic of Macedonia4,695
125Namibia4,624
126Nicaragua4,577
127Georgia4,541
128Equatorial Guinea4,480
129Madagascar4,359
130Republic of the Congo4,349
131Chad4,220
132Benin4,053
133Guinea3,917
134Papua New Guinea3,554
135Haiti3,537
136Armenia3,214
137Niger3,141
138Barbados2,813—Netherlands Antilles (Netherlands)2,790
139Fiji2,656
140Moldova2,595
141Laos2,434
142Swaziland2,361
143Kyrgyzstan2,210
144Tajikistan2,073
145Togo2,032
146Malawi1,879
147Rwanda1,835
148Mauritania1,532
149Mongolia1,516
150Lesotho1,470
151Central African Republic1,309
152Suriname1,107
153Sierra Leone1,071
154Belize1,036
155Cape Verde931
156Antigua and Barbuda803
157Guyana786
158Saint Lucia763
159Maldives753
160Seychelles703
161Burundi664
162Djibouti660
163Eritrea627
164Bhutan623
165Grenada437
166Saint Vincent and the Grenadines404
167The Gambia401
168Saint Kitts and Nevis397
169Comoros369170Timor-Leste339
171Samoa316
172Vanuatu311
173Dominica271
174Guinea-Bissau270
175Solomon Islands258
176Tonga195
177Kiribati64
178São Tomé and Príncipe64

[ur my bitch]

Very much Apples to Oranges


General Motors Market Cap

$12.43 BILLION. Yes, BILLION.

GM is on the verge of bankruptcy.

[ur my bitch]

Google is worth more than most of thosee countries.

GDP is defined bby goods and services produced by a country. Consumption + Investment +Gov't Purchases + Net Exports.

WTF do most of those countries above have, export or consume?

US GDP
12,735.30 In Billions

I know what GDP is, and I prefaced by saying apples to Oranges.

90Iceland12,258

General Motors Market Cap

$12.43 BILLION. Yes, BILLION.

GM is on the verge of bankruptcy.

The indication here is that one would be indiferent between owning all of the goods and services produced in Iceland for an entire year or owning General Motors. (Allthough liquidity is an issue)

Its just neat to see how American companies can sometimes trump foreign economies.

And yes, I'm familiar with US GDP.

[ur my bitch]

Originally Posted by ur my bitch

The sector has a 32% earnings purity, Google has 100% earnings purity. Google's forward estimates are a $7.94 mean for 2006. At a P/E of $50, that makes it a $397 stock. Historically, GOOG has traded above a $65 P/E

Anyone see that Google closed at $390.38 today? hmmmmm. Also, saw a biog debate on Google, one analyst said he can see Google at $1,000 in 3 yrs. A bunch had Google as a $500 stock, only one was bullish saying he can't tell because it looks the same to him at $400 as it does at $200

[ur my bitch]

Originally Posted by ur my bitch

Zev...I sold Sirius long ago. I sold it over the summer I think whenit peaked during a day of good news. I got into NFI @ $28 and it has been trading between $31-$32 lately, plus it pays a 14% dividend,

I also bought TWTC at $7.70. I fucked up and didn't sell when it broke through $11, but targets are $12 and I will sell soon.

I also still own and love EQIX. they report earnings Feb 8th, so my fingers are crossed for what I hope will be a positive earnings surprise.
.

NFI had hit a bump, but was back up close to $31 today on strong financial results for Q4 '05.

I ended up selling TWTC at $11.97, I made a good chunk of change, but it's now at $12.45.

I also bought more EQIX at $45.02, it closed today at $52.16. I own shares at $31, $37, $41, $45.02. Some analysts have a $60 price target...I'm out at $55 and may look to get back in on a dip. I love this company.

But, do your research and do not take anything I am saying here as advice. I am not qualified to give investing advice and do not give advice. I am just sharing my personal trades and thoughts.

Originally Posted by ur my bitch

one analyst said he can see Google at $1,000 in 3 yrs.

That's a greater market cap. than Microsoft. Can you honestly expect that a search engine with only a single source of revenue and absolutely no customer lock-in is going to become a larger company than the single largest provider of software that the planet will ever see? Microsoft is a fucking giant and it's not going anywhere, and Google will never be more valuable than Microsoft.

[ur my bitch]

LMAO, I don't see Google going to $1,000 in my lifetime.

However, I don't think you fully understand Google and I think your thought process is more academically focussed than real world based. Google does not only have one source of revenue, they do have a PRIMARY source of revenue.

Have you heard rumors that Google has been buying fibre? If it's true, it would mean Google would own its own network. They could keep people off of the public internet and have Google net. There is something to consider.

Google can go to shit, but I think it can hang at these levels for a while, I think the brain power behind Google has a few tricks up their sleeve.

BTW, did you know that Bill Gates is the largest shareholder of MSFT. That isn't such a big deal, but what surprised me was that he owns 3x more MSFT stock than the largest Institutional Shareholder. He has 927 million shares or something like that.

Academic?

You're the one who's all wrapped up in numbers and forgetting what it's really all about. 65X Earnings? Sheesh, I think I'll invest in another company with a much better return.

And blah blah blah to their other streams of revenue, they have 1 proven stream of revenue, and need to be a hell of a lot more convincing that revenue will be there in the future before being justified as one of the worlds largest companies. Really, there's no numbers about it - Google is strategically very weak.

And lets not forget that the people who run Google AGREE WITH ME!

The initial IPO was set to 125 I believe, then dropped to less than 100, because they fucked up so badly, the only thing that has changed since then is their stock price. So stocks got up to $400, google was sitting on a huge wad of cash, and what did they do? They sold more stock! $400 was such a good bargain for their stock that google itself took the oportunity for extra cash when they really even didnt need it. Nobody knows google better than google, and when google is cashing in stocks when they dont need cash - something should be signaling that even google thinks the price is too high.

[theMerciless1]

i need to dump sirius.
i bought @ 7.40, its now @ 5.20.
i'm very tempted to hold on a little longer just to get closer to my purchase price but i think its a total dog. maybe i'll start a poll and let nubblies decide unless someone can present a valid argument either way.

my other stock is doing OK. i bought HCBK @ 10.00 and it just hit its 52 week high of 12.91 this week.
It is the top performing IPO of the last 7 years, my dad was lucky enough to get in on it in '99. after splits and restructuring its has almost increased in values 10x. Bank stocks look like they're getting ready to take off too.

[ur my bitch]

Originally Posted by DJ FC

And lets not forget that the people who run Google AGREE WITH ME!

The initial IPO was set to 125 I believe, then dropped to less than 100, because they fucked up so badly, the only thing that has changed since then is their stock price. So stocks got up to $400, google was sitting on a huge wad of cash, and what did they do? They sold more stock! $400 was such a good bargain for their stock that google itself took the oportunity for extra cash when they really even didnt need it. Nobody knows google better than google, and when google is cashing in stocks when they dont need cash - something should be signaling that even google thinks the price is too high.

Unfortunately, that's not how it works. AS an insider, you have to register to sell stocks on a schedule. As an employee who has stock options,you also have a vesting period, which the founders should have well surpassed, but typically you vest ona 3 yr time frame at 50%, 25%, 25%.....or 50% yr 1 then the rest each month on a 3 yr schedule.. You also register to sell early on, and as all too many of us that had options in the DotBomb era, we all were rich on paper and failed to cash in in time. So, these guys are not stupid, they are going to cash in a good amount of shares as soon as possible because tomorrow's $ is never promised, not because they think Google is weak. If they thought Google was overpriced or weak, they would increase the shares they sold and they would move on to another venture.


BTW, Michale Moritz still owns over 14million shares. doesn't sound like he is running away exactly. Did you realize that Yahoo is a top insider for ownership? Also, the CFO owns over 200,000 shares. If the CFO is holding, then it's not a poor bet to stick it out.

Let's see what the professionals think of Google.:

Fidelity (#1 institutional owner) holds 23,251,828 shares. most recently they bought an additional 2,325,920 shares. I'm sure they know a bit more about investing than most. Fidelity owns it in their GARP fund. Growth At a Reasonable Price

Capital Research & Management Company = 16,535,700 shares Core Value fund

Alliance Capital = 8,365,670 shares Core GROWTH fund.


get it, most of the styles that opwn Google are GROWTH, VALUE or GARP. They buy stocks for appreciation.

Originally Posted by ur my bitch

Unfortunately, that's not how it works

Unfortuneately that is how it works, I'm not talking about insiders I'm talking about Google itself raising capital by issuing more equity.

Google sells $4.18 billion in stock

Web search leader Google priced a follow-on stock offering at $295 per share, raising $4.18 billion in the largest high-tech secondary sale in nearly a decade, underwriters said on Wednesday. Google went public in August 2004 and announced the follow-on offering in a regulatory filing last month. It had previously said it expected $4.11 billion in net proceeds from a shelf offering of 14.16 million Class A shares.

At the time they were sitting on nearly $1billion in cash with no obvious uses for it, taking on cash is a serious move for a corporation and you only do it in 2 circumstances:

1) You have a good use for it
or
2) It's cheap

In this case, google itself viewed its stock price as overvalued and saw an opportunity to raise $4 billion even though it had no major acquisitions in mind.

[THEINCREDIBLEdork]

hehe i forgot how funny google sounds.

google. goog-le. goooooogle. gooOOOOOooooogle. gewgle.

hehe

[ur my bitch]

lol. you have no idea wha they are doing with the money. And I doubt it was because they just figured their stock was overvalued.

They are acquiring their own network. do have any idea how expensive that is?

Originally Posted by ur my bitch

lol. you have no idea wha they are doing with the money. And I doubt it was because they just figured their stock was overvalued.

Here's a WSJ article which agrees EXACTLY with what I am saying:

Google's Stock Sale Mystery Is
Simply Solved: There Are Buyers
August 24, 2005

(See Corrections & Amplifications item below.)

Google's decision to issue $4 billion in new stock has been greeted with surprise and stupefaction by the army of analysts who are overpaid to divine happenings within the Googleplex.

It is an impenetrable mystery, they say. The company already has nearly $3 billion in cash; why does it need more? Are the Googlers planning to build a global wireless network? Dive headlong into Internet telephony? Construct an elevator into space? And why, oh why, the strange numerology -- selling exactly 14,159,265 shares, which every educated 13-year-old recognizes as the digits to the right of the decimal point in the mathematical term pi.

Hello?

Let's try a little test. If I offer you $100,000 for your Honda Civic, how would you respond? Here are your choices:

a) "No, thank you, my checking account is already full."

b) "Maybe, but let me look around first to see if there is another car I'd like to buy."

or

c) "Here are the keys."

If you answered a) or b), you have the makings of a Google analyst.

There is no mystery here, folks. When companies think their stock is undervalued, they buy it back. The Googlers are in the opposite fix. Their stock is overvalued, so what do they do?

Sell more. Quickly. Before sanity returns to the marketplace.

Now I know there are a number of hypothetically smart people out there who think that at $285 a share, Google still is a bargain. Some were quoted in the pages of my favorite newspaper last week. "We think it's extremely cheap at this level," said Jason Schrotberger of Turner Investment Partners Inc.

But it is a credit to Larry Page, Sergey Brin and Eric Schmidt, the trio who run Google, that they aren't drinking this intoxicating Kool-Aid. It is always hardest to recognize a bubble when you are being lifted by it. But the Google boys seem to have gotten the message.

How do I know? Well it certainly isn't because they have told me, or anyone else -- that would be a breach of fiduciary duty to their current shareholders. But watch what they do, not what they say.

In recent months, the top Googlers have sold off nearly $3 billion of their own holdings. These insider sales all have been on the up and up, conducted under a so-called 10b5-1 plan that allows them to sell a predetermined number of shares over a given period. Diversifying their riches in this way would be a wise strategy for the Google boys under any circumstances. But it is particularly wise if you suspect your stock has a touch of hot air.

They also have been changing their compensation plans, moving away from reliance on stock options, which become worthless if the stock drops. Instead, they have started using Google stock units, or GSUs. That is Googlespeak for restricted stock that takes four years to vest, but will continue to hold value even if the share price swoons. The company issued 61 million GSUs in its second quarter.

If that isn't evidence enough that Google is preparing for the bubble to burst -- or at least deflate a bit -- then the new stock offering should be. The company says it has no specific plans for the cash. "The principal purpose of this offering is to obtain additional capital," Google lawyers wrote in their registration statement with the Securities and Exchange Commission. "We have no current agreements or commitments with respect to any material acquisitions."

Like George Mallory and Mount Everest, they are taking the money "because it's there."

In an earlier age -- think Steve Case and America Online -- the Google boys might have cashed in by swapping their inflated stock for that of a more traditional company -- think Time Warner. While a fool may be born every minute, they don't all make it to the top ranks of corporate power. No savvy chief executive wants to go down as this generation's Gerald Levin. So instead of selling its stock to another company, Google is selling to the public.

None of this is to suggest Google is anything other than a very good company. The Google search has become a central part of modern life -- I did five of them in the course of writing this column. And by linking advertising with search, Google has found a gold mine.

But will revenue from that gold mine continue to increase indefinitely at the 35%-a-year gallop implied by current valuations? I doubt it. More importantly, the Googlers themselves seem to doubt it. And they are smart guys.

[ur my bitch]

who cares if that one article agreed with you? The article also states that $285 for Google is way over valued. Yet, 6 months AFTER that was written, Google is $200 higher.

We'll see at analysts day tomorrow what Google has to say, but there are more people thining Google is going to the mid $400's than $200's.

I guess theere is a reason that guy is WRITING about investing and NOT investing. He works for the WSJ, and not a hedge fund or any street firm.

Tomorrow's meeting will hopefully clear up some confusion and speculation. Google maybe over priced at its current level, I don't know. I can't afford to buy it and make a good profit, so I don't spend time analzing it like other stocks. However, the professionals tend to think Google still has some gains to be made.

[ur my bitch]

BTW, Google is only trading at 42x 2006 estimates and 32x 2007 estimates.

The $450 target price (year end 2006) most analysts have is only 40x 2007 estimates. First Albany reiterated their BUY rating on GOOG with a target of $450. Tomorrow, analysts expect GOOG to discuss its reliance on paid search, efforts to diversify revenue sources and give more color to their financials.

Again, one thing you need to realize is technology companies are also valued differently than ost companies. EBITDA is a key factor. Also, a ratio of Enterprise Value/EBITDA (EV/EBITDA) is a number everyone seriously looks at for tech. companies.

Also, did you realize Google has adeal with DELL? DELL is currently shipping computers with Google products preinstalled.They also have dMarc as a seperate revenue source. Also, isn't Google doing a payment thing, similar to PayPal? Again, another revenue source.

but there are more people thining Google is going to the mid $400's than $200's

The ratio is actually 3 to 1 in favor of Google's price reaching 250 before 500.

http://discussions.wsj.com/n/mb/view...ote=0&msg=3821

Which level will Google's stock, which closed around $363 on Tuesday, cross first?

$250 3237 votes (73%)
$500 1174 votes (27%)


4411 people have voted so far