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Google and Red Hat added to Nasdaq
Rob writes "Google Inc and Red Hat Inc are two of the big technology-related stocks to be added to
the Nasdaq-100 in the latest annual reordering of the 100 largest non-financial stocks on
the Nasdaq stock market. Meanwhile, the addition of Raleigh, North Carolina-based Red Hat
reinforces the credentials of the open source Linux operating system on which the company
has built its business. "
I get more and more flasbacks from the late '90's these days. Let's hope this time people keep their heads together.
-- Cheers!
The subject line really surprised me, as I was sure that those stcoks had been on Nasdaq since they went public. (Pretty much everything is on Nasdaq). I guess I should have known better than to trust a slashdot subject line. The Nasdaq-100 is not the same thing as the Nasdaq.
Sort of reminds me of all the management types here at work who don't know that ISO means anything other than ISO 9000.
The Nasdaq 100 is only updated once a year, in December.
That's my motto buy high, sell low.
Seriously, one would be stupid to buy only for your two reasons. Adding new services does necessarily mean more revenue. Are you aware of how many companies have suffered when they tried to do too much?
Maybe you were trying to be funny
Well, who knows how high it can go? It would've been nice to get in on the IPO.
;)
Remember, GOOG is a very young stock. Those amazing highs are often countered by amazing lows later on.
-The 1920s, the ROARING '20s, were followed by....worldwide depression.
-The 1990s tech bubble, pop!
Also, Google makes most (all?) their money from advertising, not a product sold, which is a tad shaky in itself. What if enough people use Firefox and AdBlock, and block all of their ads?
As for me, I think I'll wait a while before investing in ANY tech company. Heck, something else big and great may come along and Google may go the way of Altavista, for all we know.
A year of solid revenue growth has seen Red Hat's share price rise to $25 from $16 a year ago.
I would guess the stock will rise higher in the next few weeks, not a bad time to buy RHAT stock.
"Red Hat, Inc.: Stock Rating 9 - Red Hat, Inc., a mid-cap growth company in the technology sector, is expected to significantly outperform the market over the next six months with average risk."
From: http://moneycentral.msn.com/investor/srs/srsmain.
More info here:
http://finance.yahoo.com/q?s=RHAT
He who knows best knows how little he knows. - Thomas Jefferson
Well, I wouldn't say "everything" is on the NASDAQ. NASDAQ is one of the major stock exchanges in the US; the biggest and oldest one is the New York Stock Exchange. A particular stock is usually traded only on one exchange. NASDAQ is heavy on tech stocks, and NYSE is heavy on older, more blue-chip kinds of companies. Most of the companies that affect Slashdot are listed on the NASDAQ, but for most of history it's the NYSE that's been considered the more important index.
The NASDAQ 100 is an index; that is, it's a number designed to tell you how the NASDAQ as a whole is doing. The most famous index is the Dow Jones Industrial Average; when people say "the market is up" they usually mean the Dow.
The Dow is designed to track big old industrial companies like steel, sugar, and railroads. They're "blue chips", meaning they turn in reliable, consistent profits, and are thus supposed to be a good measure of the overall long-term health of the economy. It's heavy on NYSE companies, though NASDAQ companies are gradually creeping their way onto it.
Google has been an innovative and interesting company, and Red Hat probably has the best name recognition for Linux in the business. These steps make sense.
The big question with Google is if these laurels that people keep heaping on them will last when Google inevitably loses stock value, for whatever reason. Hopefully, being added to an index like this indicates that some smart people feel that they are here to stay. However, I think most financial people slept through their classes on "Long Term Investment" in business school (if indeed business schools actually offer classes like that anymore).
Google's success = Innovation and they will need to keep innovating if they want to remain relevant. There is always going to be a Microsoft or other competitor who can figure out a way to clone Google's offerings with "just enough" functionality, the right price point, and some evil marketing ploys to create instant competition.
To remain in this game with a high level of quality means new ideas and the willingness to go to places no one thinks can be reached. That will become harder as some of the money pumped into them starts acting like cholesterol: slowing them down and cutting off blood flow to people's brains. Ph.D's may be good at what they do, but they aren't immune to corrosive influences of cash and the lures of prestige. There is going to come a point where Google starts to face the potential for crippling hubris, and at that point, the company will reach it's first real test as a long-term investment. If it can get over its own reputation and keep going, then you have a company worth owning. If not, then they go the way of the 90's, sooner or later.
You don't just add companies to the NASDAQ 100. You also have to drop them. The losers this time:
Career Education Corp.
Dollar Tree Stores Inc.
Intersil Corp.
Invitrogen Corp
Level 3 Communications Inc.
Millennium Pharmaceuticals Inc.
Molex Inc.
Novellus Systems Inc.
QLogic Corp.
Sanmina-SCI Corp.
Synopsys Inc.
Smurfit-Stone Container Corp.
I've never heard of most of these companies. And that's one of the problems with the NASDAQ 100 as an index. Its contents change often, to drop losers and reward winners. Which means that the NASDAQ 100 is constantly rising as long as they can find some stocks going up.
How can you compare today's NASDAQ 100 index with yesterday's if the stock on it change? They weight the numbers to ensure that yesterday's number is the same as today's, but it means that tomorrow's number is on a completely different scale. The NASDAQ will almost certainly go up because you've replaced losers with winners, but that makes it hard to use yesterday's numbers with tomorrow's numbers to help visualize the overall trend.
The NASDAQ 100 index is far flakier than the relatively stable Dow Jones Industrial Average, which is why the NASDAQ 100 is less often reported than the Dow. It's supposed to measure the health of the hot tech stocks in the US, which means it's going to be flaky, but it also makes the number somewhat less useful.
People say Google can't be overvalued because it's making so much profit, unlike all the dot.coms back in the day.
But people forget that there were plenty of tech companies that WERE making craploads of profits back then, like Sun and Cisco and various telecom manufacturers. Just because they had profits didnt mean they weren't overvalued stocks. Cisco and Sun fell 90% anyway, because they were in a speculative bubble.
Who would have imagined that Don Lapre's late night infomercials telling you the secret to instant wealth was actually true? (placing tiny classified ads in hundreds of newspapers and taking a small profit on each one) Google and Overture apparently took that informercial in mind while developing their business plans. Except isntead of newspapers, they use websites.
Who woulda thunk it?
Well, TFA is news.
Get used to rejected stories. There is even a whole section in the FAQ devoted to people who wonder why stories get rejected.
I'll tell you this, though -- not many of the stories that are accepted are submitted by slashdotters with high user ID#s.
I'm sure part of that has to do with the number of submissions -- I'd imagine that newer slashdotters tend to submit fewer articles (especially after being rejected a half dozen times). Part of it also probably has to do with paid product placements (though I haven't seen proof of this).
But I'd speculate that a lot of submissions are dismissed out of hand. Who knows why?
At any rate, it's not worth getting upset about. Most slashdotters who've been around awhile are quite familiar with the phenomenon, though plenty of people will slag off the editors when given a reason (however small that reason may be).
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
$400 a share keeps a lot of uninformed lower budget casual traders out of the stock and therefore reduces its volatility. Seems like a good idea that they don't split it. Plus, look at all the tech companies that split multiple times during the boom and eventually had their stock go down down down. Best for google to wait another year or 2 and see where the stock levels out too before deciding whether to split.
Did the tech wreck of 2001 teach you nothing? The only thing completely stupid is to assume things don't change.