Google Share Loss Amounts to Billions 316
aCoward writes "Today's full page headline on the UK Independent: £13,000,000,000 in Googlised colours, with the subheading Google shares plummet in one day amid growing fury over censorship and plagiarism. While the company says it isn't worried about the stock price correction, there are other issues at hand." From the article: "Google is under mounting pressure from many traditional industries: telecommunications companies do not like its plan for free internet phone calls, book publishers and newspapers have filed a lawsuit to try to prevent it from digitising library materials, governments are worried about its satellite-imaging service Google Earth and privacy advocates have a growing list of concerns about everything from its e-mail service to its desktop search function, both of which may make it easier for hackers or government agencies to gather information about individuals without their consent."
Now I'm Confused (Score:5, Insightful)
From TFA:
It was the second time in a week that Google shares - the hottest, most talked about company stock in the world - were plunged unexpectedly into a frigid bath.
Ok, shares plunged. Got it. Now, let's go look at the big board [yahoo.com] for the last five days. Ok, I see the plunges, $430 to $390. Ouch--12%.
But with today's trading, as of 11 AM Central Standard Time, shares are hovering around $405 [yahoo.com]. How frigid is that "bath" if it only takes five days to get back up to $430? Clearly it's already rising back up to its once held position.
Perhaps it's time I make 12% on that extra $1,000 rainy day money I've got lying around. What does slashdot think? Google stock for the (almost certain) cash or Rickenbacker bass to make my going-nowhere-band slightly better?
Re:Now I'm Confused (Score:5, Insightful)
I will simplify it the best I can- Google's profits were pretty good. But they weren't as good as some analysts projected
The high google prices were based on the analysts projections, so when google failed to meet the projections, their stock went down
I won't get into the foreign currency accounting crap that led to them being in a higher tax bracket and thus having lower profits.... (Foreign currency accounting was the most annoying accounting class of the many I have taken...)
Re:Now I'm Confused (Score:5, Insightful)
Instead of trying to predict what the stock market will do, which is difficult, and you have to compete against thousands and thousands of analysts, you just try to predict what the analysts will do, and take advantage of the ripples they cause.
Re:Now I'm Confused (Score:2)
Yeah, and let's then predict what the analysists that analyse the analysists predirect! Everyone will be a millionaire before you can say "bubble *splat*"... :-)
Re:Now I'm Confused (Score:4, Insightful)
They both advocate that you TOTALLY IGNORE what the market is doing because it is impossible to predict. Buy stocks on their MERITS. If a stock meets your fundamental merits, and the crazy wiles of the market seem to have made it under priced because of some moronic panic or something similar... Then buy it.
And hold it - especially if it pays dividends - and never let go of it. Well, almost never. If the market goes really crazy, and you have an opportunity for a large capital gain *OR* the fundamentals are no longer solid. Then sell.
Using this technique, I made 45% profit on my stocks in the last 2 years.
Remember, better than 10% yearly return beats the market, and most people can't do that. Not even the so called "experts".
For reference:
The Warren Buffet Way 2nd Edition
Beating the Street, by Peter Lynch
The Future for Investors, Jeremy J. Siegel
The Intelligent Investor, Benjamin Graham
Re:Now I'm Confused (Score:3, Insightful)
The high google prices were based on the analysts projections, so when google failed to meet the projections, their stock went down
Um... if Google doesn't meet the projections, doesn't that mean that the analysts are the ones that have failed?
Re:Now I'm Confused (Score:3)
Didn't you read the article? It explains what happened to Google's share price: "It was the second time in a week that Google shares - the hottest, most talked about company stock in the world - were plunged unexpectedly into a frigid bath."
There was shrinkage involved!
Re:Now I'm Confused (Score:4, Funny)
Re:Now I'm Confused (Score:3, Interesting)
So, in other words Google's inflated stock price fell down temporarily because someone outside of their company screwed up in projecting their profits.
The funny thing is that Google's owners and employees are probably the least concerned with their profits. Sergey that is one of the original two founders of the company works for a $1/year, drives a lavish Toyota Prius, lives in a small
Couple of problems (Score:5, Informative)
2) It's not necessarily clear that Sergey can sell those shares. Most of the time in an IPO, the founders (etc.) get N shares, but they can't legally sell them for a period of time after the IPO. That helps keep the founders (etc.) in line while the company gets used to being publicly traded. As such, his net worth on the N shares he has is N*(price of google stock), but it's illiquid.
Less formally, should that not be the case, and he dumps all his shares, what do you think happens to the company? A founder of the company has basically said that he has absolutely no faith in the ability of the company to make money moving forward. If that happens, a 12% dip is going to seem like a nice day.
The people who generally make real money in on IPO are the investment bankers and venture capitalists, not the founders.
Re:Now I'm Confused (Score:2, Informative)
Re:Now I'm Confused (Score:2)
The more volitile your stock values are, the harder it is to 'plan' for the future.
OTOH, Google has already said they don't give a damn about the short term. The founders have 51% of the stocks & Google doesn't release quarterly reports.
These guys are in it for the long-haul and a 2-week swing in their share prices doesn't really mean anything to them, even if they personally stand to lose a shitload of money every time it happens.
Re:Now I'm Confused (Score:5, Informative)
Re:Now I'm Confused (Score:3, Informative)
Correction--they don't release quarterly estimates. Every public company has to release their actual, quarterly results through SEC Form 10-Q. fyi, 10-K is the annual report.
Re:Now I'm Confused (Score:3, Funny)
Re:Now I'm Confused (Score:5, Insightful)
Well if you really want to make money in the stock market you have to have some insight beyond the average investor. The fact that Google has awesome growth potential is already factored into the price. From a purely technological standpoint, it's obvious that they have great ideas and the stock could go much higher. But the real uncertainty is with so many different companies and organizations out for Google's blood, they could get into serious legal trouble which could stop a lot of their innovation dead in its tracks. I don't think anything could kill Google at this point, but its definitely conceivable that the share price could lose 50% of its value and take decades to get back to where it was. That's not what I think will happen, but that's the type of risk you run investing in volatile stocks. If you've got $1000 to spare and you feel like a little gambling, then go for it, your odds are definitely better than in Vegas.
short term individual stocks = lottery ticket (Score:2)
Well if you really want to make money in the stock market you have to have some insight beyond the average investor.
The problem is that even if you do have insight beyond the average investor, that doesn't mean that your investment will act as you expect it will. Attempting to guess at whether an individual stock will do well is akin to guessing at the beginning of the season who will wind up in the Super Bowl. By the way, according to Gambling911 [gambling911.com], the Steelers' odds of winning the SuperBowl were 12 to
Re:short term individual stocks = lottery ticket (Score:2)
Shouldn't it be a 50/50 shot?
Re:Now I'm Confused (Score:3, Informative)
The way I look at it, the stock market is driven by three things: greed, fear, and information. To beat the market, you need to be more rational than the next guy (less subject to greed and fear) and/or have more information. Then you can recognize when the market has overpriced/underpriced and act accordingly. This isn't impossible, but it is difficult and it is risky. Unless you're good an
Re:Now I'm Confused (Score:3, Insightful)
Please take two ritalins, rotate your stock portfolio by ninety degrees, and try again later.
Re:Now I'm Confused (Score:2)
I fixed that for you. Don't ever suggest that someone trading stocks take perscription stimulants. It can only end badly as their heart races wildly out of control.
Re:Now I'm Confused (Score:5, Insightful)
If you want to learn more, I suggest at least doing a trial of IBD. I've recently listened to an audio book that was quite helpful as well: http://search.barnesandnoble.com/booksearch/isbnI
Not Too Rational (Score:5, Insightful)
I see little evidence that (in general) individual investors are emotional and institutional investors are rational. Quite often it's the opposite. This is particularly true when markets turn sour, and the insititional investors are yelling "sell, sell, sell" just when stocks are cheaper.
Individual investors have the luxury of being their own boss. They can hold on to any stock they want for as long they want. In the past I've bought stocks in steel and forestry that I knew were in a depressed industries. I knew I might have to wait 5 years of more before they turned around. I also knew that when they did they would double or more (thank you, IPSCO).
Institutional investors, on the other hand, are constantly having their decisions questioned. They know that even one bad year can mean the end of their job. Thus they can not afford to be too patient or too rational. They have to ride the trend.
Re:Not Too Rational (Score:2)
Re:Now I'm Confused (Score:2)
Re:Now I'm Confused (Score:2)
Re:Now I'm Confused (Score:4, Informative)
I don't know if you could even get someone to part with just two shares. While it's not always the case, most shares are sold in lots, and a common lot size is a multiple of 100...Expensive shares like Google will definately have more exceptions, but I still doubt you will be able to buy only a $1000 worth of Google.
In fact
Most companies "manipulate" their stock price by splitting [sec.gov] when it's too high, and do a reverse split [sec.gov] (not so common as it's not always seen as a positive sign for the company) when they want to increase the price of the shares. They do this to attract certain levels of investors.
Re:Now I'm Confused (Score:3, Informative)
So true.
And there's always Berkshire Hathaway http://finance.yahoo.com/q?s=BRK-A [yahoo.com]
Never split, 88K per share. Stop by the home page http://www.berkshirehathaway.com/ [berkshirehathaway.com] and read the Owner's Manual for some great investing advice, not just for Berkshire shares.
Re:Now I'm Confused (Score:2)
Re:Now I'm Confused (Score:2)
And the sad part (Score:5, Funny)
Is the stock market full of asshats or what?
Re:And the sad part (Score:4, Informative)
It doesn't matter how big the profits are- they could be 1000%, but if the projections were 1100%, the stock will drop... Nothing asshat-ish about it....
Re:And the sad part (Score:5, Informative)
Those analysts don't have complete information.
Google said that if their tax rate hadn't been running 41.8%, they would have outperformed the analysts projections
here's a googd article explaining why their tax rate was higher
http://www.marketwatch.com/news/story.asp?guid= [marketwatch.com]{A
Or, you can pick your own article
http://news.google.com/news?q=google+tax+rate [google.com]
The large investors & smart analysts stuck by Google once they heard the explanation.
Re:And the sad part (Score:4, Interesting)
Now this doesn't mean the company is in trouble or that is outlook isn't even perhaps better today than it was a quarter ago. It is simply a market based reality. If your performance is under the best projection that people used to value the stock, the stock will correct to account for that unless another outside force counters that.
Re:And the sad part (Score:3, Informative)
Is the stock market full of asshats or what?
No, what you forget is that stock prices are determined by how valuable people think the shares are. If I expect profits to be up, say, 90%, I might be willing to buy shares for $450 each, but if I expect them to be up 82%, I might only be willing to pay $400 per share. So, if my expectation of 90% growth isn't met, but I've already b
Re:And the sad part (Score:2)
Standard wisdom: "The markets are driven by fear and greed."
Think of it that way and you'll maybe understand better.
The most profitable corporations aren't getting any love either. Exxon-Mobile stock did nothing because people don't expect they can keep up the sort of profit-making they had this last year.
Wal-Mart comprises 2% of the entire US economy. That's absolutely HUGE. Yet they can't get any traction because people are afraid they can't increase profits by
Re:And the sad part (Score:2)
What's standard for a mature company, ~20-25 PE? So Google would have to double or triple earnings to maintain current price if one assumed no growth?
Re:And the sad part (Score:2, Informative)
So, it lost a couple billion... (Score:2, Insightful)
Re:So, it lost a couple billion... (Score:2)
Re:So, it lost a couple billion... (Score:2)
Re:So, it lost a couple billion... (Score:4, Insightful)
Re:So, it lost a couple billion... (Score:2)
Re: (Score:2)
Call me Nostradamus (Score:3, Insightful)
I'd say call me Nostradamus, but this should have been obvious to everyone.
politics? (Score:2)
Re:politics? (Score:2)
Good Short Sell Opportunity?? (Score:2, Insightful)
Re:Good Short Sell Opportunity?? (Score:2)
Re:Good Short Sell Opportunity?? (Score:2)
Of course, if you're feeling really frisky and very bearish on Google, you could always sell uncovered calls. I bet there are a lot of people out there willing to buy March 500s! (God forbid it should actually hit that, though, you'd be ruined.)
*Note: the above does not constitute investment advice. When trading, always evaluate a stock's risks and objectives. Consult a financial professional for more details.
Re:Good Short Sell Opportunity?? (Score:2)
Otherwise, you're right. Buying options is generally safer than short selling.
Re:Good Short Sell Opportunity?? (Score:2)
The premiums on the options are almost as whacked as the stock itself. A June '06 350 (which I'm picking almost at random) is going for $15.90. So it's going to cost you $1590 to just to buy 100 contracts (the minimum, for those new to options trading, all trad
Re:Good Short Sell Opportunity?? (Score:2)
Clearly some of this valuation is growth related; stock holders believe that future earnings are not only in the bag, but they're also much larger than current earnings. So shorting GOOG is a bad idea. But even if you disagree with how valuable the company is, the fundamentals are still strong. They're making
Re:Good Short Sell Opportunity?? (Score:2)
Especially when brokers will be happy to sell you fractional shares in amounts as small as 0.001 shares.
That's why share price isn't very important. Google's over 400 per share. But they could split 10-for-1 and be only $40 per share, and it would be no different.
Hell, Buffett's company is on the order of $90,000 per share. That
This has nothing to do with censorship (Score:3, Interesting)
Let the games begin... (Score:5, Insightful)
Google may have a hard time, but (Score:5, Insightful)
At the end of the day, even if Google stops expanding right now - cuts out Google Earth, Google News, etc it would still have a massively profitable advertising business. So even if its growth slows, even if its stock plumets (face it, it is unreasonably high), it isn't going anywhere. As Google itself said - there's no reason to worry about the stock dip.
Re:Google may have a hard time, but (Score:2)
What happens? Awesome happens!
Google: "We're always watching, be
Re:Google may have a hard time, but (Score:2)
Time to buy (Score:2)
If it was waking up and smelling the coffee, that'd be a different story.
A much simpler reason for the price drop. (Score:5, Insightful)
"Google co-founders Larry Page and Sergey Brin have vowed not to forecast the company's earnings because they worry about becoming caught in a trap that will require them to focus on short-term profits at the expense of what's best for the long haul.
The no-guidance policy has forced analysts to make educated guesses that previously vastly underestimated Google's rapid growth. And that helped fuel perceptions that the company could do no wrong."
Meanwhile, anyone that bought in at the IPO or any number of months ago is sitting pretty.
Oh come on. (Score:2)
Re:A much simpler reason for the price drop. (Score:2, Insightful)
There has to be someone there willing to sell when you think it's low, and to buy when you think it's high. Someone who has a different expectation of low/high than you do. If everyone had the same expectations of the market, no one would want to trade.
Interesting test case (Score:3, Interesting)
I'm not asking that in a wide-eyed naive way, but rather in a realpolitik way: Can a company make compromises with the "keepers of the keys" without losing its core values?
The deal with the PRC to censor certain anti-China items comes to mind. According to Google, the situation is "better with them there than not." At what point does a rationale become a self-serving rationalization?
Math? (Score:2)
Isn't that... alot? Or did I miss something?
Re:Math? (Score:2)
Seems to me... (Score:3, Insightful)
Re:Seems to me... (Score:2)
Man I wish I had Google's problems (Score:2)
Part of the reason.. (Score:2, Interesting)
If that growth rate slows to that or a more "normal" company then yes the price will tumble as the numbers will dictate that it is not wise to bet on growth to continue at that pace in the future. This is not Wall Street being stupid and not valuing Google as much as it is Wall Street realizing that maybe they were too optimistic that Google represented
I wouldn't be worried (Score:2)
And I don't think we're going to stop using google search and google maps and all the other tools just because their quarterly earnings are a little under expectations.
Plagiarism (Score:5, Insightful)
I would have thought that a journalist would understand the difference between plagiarism and copyright infringement. They are two separate things. Plagiarism is when you take credit for others' work. Copyright infringement is when you copy something that you aren't legally permitted to. You can commit copyright infringement without plagiarising (e.g. the majority of music sharing) and you can plagiarise without committing copyright infringement (e.g. taking credit for something that is public domain).
As far as I am aware, Google are not being accused of plagiarism by anybody but this journalist. They are being accused of copying news headlines illegally, but that's clearly not plagiarism, as the headlines link to the original story.
What the stock charts won't show... (Score:3, Insightful)
The real story is that the stock plummeted about 16-18% in about the 20 minutes after market close. Overnight, that number readjusted to about 4%. Therefore, all the charts out there will neglect the momentary 16-18% drop, and just show the 4% drop. I've personally taken a small hit from the recent GOOG shakiness, but realize that it's only the short-term investors that are causing this. I bought (a small amount of) GOOG stock not for a quick buck, but for long-term appreciation. I sincerely think Google is doing good things that will make money for its investors (eg: me).
Re:What the stock charts won't show... (Score:3, Insightful)
Someone sees this as a buying opportunity (Score:2)
http://www.stockmarketgarden.com/standard-portfol
$13,000,000,000 - that's a big number (Score:5, Interesting)
Maybe Google shouldn't have based its operations in the States? All of these companies are now thinking about suing Google for threatening their older business models. No surprise there. But we now see how NTP patents are being thrown out of the patent office, the same can happen to other firms. Google has plenty of leverage now, even government officials maybe using it once in a while. On the other hand Google has probably pissed off some people in the government, who wanted to get access to their search logs.
In any case, all of this stock price movement is based on speculations. It was based on speculations that Google will do well in the beginning, and it is based on speculations that Google may get hurt by other firms and even the government.
As the user of Google search page but not a shareholder of Google stock, I only need to know how these speculations will affect the quality of the free services I am getting from Google. Everything else can burn in hell.
Re:I click the links! (Score:2)
Privacy and governament (Score:2)
Do people actually think that it is because of programs like GooleEarth that allows governament agencies to spy?
I could just picture dubbya sitting at the edge of his chair on release day saying, "now I can finally see what my house looks like from the sky!!!"
Like gimme a break. I bet all this FUD is just a bee put in someones bonnet with a whole bunch of dollar bills to keep it there. Remember that joe smith is already sold on Google but M$ controls tho
Re:Privacy and governament (Score:2)
Not surprising (Score:2)
$400 a share won't
Summary (Score:2)
Civil liberties advocates are unahppy because Google is collaborating with a government to restrict individual freedom....
I am grouchy about what Google is doing in China, but this article does give me pause. I'd rather see Google survive and take on all those other repressive forces (which are hard at work in democratic countries to convince us that we have to be restricted from information to
fight the good fight (Score:2)
The two extremes of the net seem to be: (A) A useless copy of what is out there in the real world. Because of copyright laws, links can only be done to the top of a website, and the majority of content in the real world will never reach the interweb. (B) All i
$13B US not 13B Pounds! (Score:5, Informative)
Re:$13B US not 13B Pounds! (Score:5, Insightful)
Google didn't lose anything. It still has the same assets and liabilities it had a week ago.
Share price is nothing more than an index of investor confidence in the company, and investors aren't always wise.
Re:$13B US not 13B Pounds! (Score:3, Insightful)
Consider this... (Score:4, Interesting)
As Google becomes bigger (read : multisector monopoly), consumers liked Google more, and companies Google them less.
The difference?
Microsoft's user products generate their own sector where third parties can create products for the Windows platform. Google's products do not. Google's user products are (currently) free, if you don't count the ads. Microsoft's are not.
My conclusion:
Microsoft provides most benefit to companies, Google provides most benefit to consumers. Microsoft relies (mostly) on consumers for its revenue. Google relies mostly on companies for its revenue. Both are currently antagonising their customers, but an individual Google customer is more important than and individual Microsoft customer.
This is all just my observation and opinion, so I'd be interested to see what others think about it....
Re:Consider this... (Score:2)
Re:Consider this... (Score:3, Insightful)
The people who hate Google are the people who's businesses are obsolete by the information age. Who's target number one, in their mind? Google.
Fighting history (Score:5, Informative)
The U.S. is in a transition, for better or worse, from the manufacturing economy we've had since 1900 or so to an information economy. I put the date at 1900 since that was about the time the country was mostly settled and people started to buy cars and appliances. The connectedness of everything, in which the primary means of communication is the Internet, spells fabulous riches for those who can take advantage of it.
The culture and legal micro-management of companies which encourages them to extract the highest short-term profit, at the expense of the long-term health of the company, is destroying our manufacturing base. Everything except weapons will soon be built overseas, since weapons have to be built in a Congressman's home district or they don't get his vote. Most such are built in as many different districts as possible, at the expense of efficiency and quality.
Google, Yahoo, Microsoft, AOL, and others will be the new GEs and GMs. The hardware companies will continue to make money, but with lower and lower margins, as more and more capability to access the network gets built into different appliances. Wal-Mart will suck up all the retail business, buying up all the corner grocery stores.
Wrap all of this together and you see that it's pointless to fight the information wave. Google isn't inventing new, illegal uses for other people's information; they're applying old principles to the new connectedness. Others will copy their model, to varying success. The folks in suits had better get in the boat, or be washed away.
The "information economy" is a sham. (Score:3, Insightful)
No, we've completed a transition from a productive, creditor nation to a consumer, debtor nation in about 30 years. Someone produced all those neat toys that make your "information economy" possible. Odds are, it wasn't an American. Ideas and "intellectual property" are not tangible goods being produced by this nation. They take nearly no effort to copy. No amount of DR
And in other news... (Score:3, Funny)
Enjoy the ride, folks! (Score:2)
Re:Enjoy the ride, folks! (Score:2)
My biggest concern is that there is an actual recourse for these agencies that despise the free service. Free online calling is not exactly free - again with the "we pay for internet access" argument that says I've already paid for my data communications line.
However, what's really scary is that it's entirely plausable that pay-for-phone companies could actually get Congress to stop Google from giving out phone capabilities for free. L
privacy advocates (Score:2)
1. Gmail has had its share of security holes.. then again, so has just about every other email service. Nothing to go getting your knickers in a twist over. If you want serious security, you get yourself a professional email service, anyways. (And
And Atlas Shrugged (Score:2)
Re:Use Mozdex.com (Score:2)
On the otherhand, it still has a ways to go to match google
Re:Use Mozdex.com (Score:2, Funny)
If I type "kfg" into Google my Slashdot user info page is the number two hit.
If I type "kfg" into Mozdex it doesn't even show up.
You suck.
KFG
Re:Use Mozdex.com (Score:2)
Re:Use Mozdex.com (Score:2)
To put it bluntly (Score:4, Funny)
It's worse than using a retarded monkey throwing darts to pick your stocks.