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Google Share Loss Amounts to Billions
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."
In fact, the censorship stuff would make people more intrested in investing. The problem is that they missed earnings estimates (not their own estimates, but other peoples). Some people say because of a diffrent tax scheme or whatever, but I doubt that.
autopr0n is like, down and stuff.
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?
Human being (n.): A genetically human, genetically distinct, functioning organism.
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 the second coming of the dot com boom. If Google continues to behave more like a regular business in relation to growth rate and earnings expect it's stock price to come back down out of the stratosphere over the next year or two.
Also, Google is starting to get into the "throw a lot of things at the wall and see what sticks" model of new projects. Probably because they have oodles of cash sitting around and they need to do something with it. Unless those start bringing in profits traditional investors will start losing faith in the company, and that spells lower stock prices.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
I still don't understand how can Google be valued at over 100 billion USD. An advertising company that also built some pretty good software? The lion share of their profits comes from ads, but I never click on those ads. I guess there must be someone out there who does click on them.
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.
You can't handle the truth.
As Microsoft became bigger (read : multisector monopoly), consumers liked Microsoft less, and companies liked Microsoft more.
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....
Windows in 6 Bytes (IA-32) : 90 90 90 90 CD 19
Google (unlike almost all other tech companies) don't give thier own quarterly projections, so incomplete information or not, the analysts projections were the only projections out there (unless individual some investors did thier own), and thus were relied upon when coming to a valuation. Stock prices aren't set based on last quarters performance, but on next quarters perforance. If the final numbers come in under best available projects (based on full information or not), you will see a correction.
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.
"reality has a well-known liberal bias" - Steven Colbert
You should be able to use multiscale perturbation theory to account for the meta-analysis. I would imagine that the problem would become flat and very shallow after 2 or more meta-analyses for any reasonable amount of time. Hopefully this will allow me to make this model into a forced oscillator. It probably won't work, but in my opinion if you can't make a mathematical model into a harmonic oscillator, a damped harmonic oscillator, or a forced harmonic oscillator then it isn't worth doing.
But it should be noted that the grandparent had an important point which is critical to understand if you want to go into trading. For the short term, you do not care about how great some company is or how terrible another is. You only care about trying to outsmart the other traders. Someone is selling or buying a stock because they think they are smarter than you. They think they are going to make a profit by their actions. Are they?
I will simplify it the best I can- Google's profits were pretty good. But they weren't as good as some analysts _projected_
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 apartment, usually wears blue jeans, and is _personally_ worth $7 to $11 billion dollars.
Do you think someone like that really cares about the profits Google makes? Worst case scenario is that Google gets succumbed into the corporate greed of its stockholders, he sells all of his shares and starts a new company, or even worse, he just takes the rest of his 30 to 70 years of his life off from work and just plays around.
What you are describing is the transition from the fourth Kondratieff Cycle (or Long wave of economic development - Schumpeterian wave I believe) , Fordist manufacture capitalism, to the fifth, informational capitalism. This is a fairly prevalent concept in the social sciences.
There isn't just a jolt from one cycle to the other - rather, after peaking a cycle goes into a downswing and after a while a new cycle swings up whilst that downswing is happening. The date when the fifth cycle's upswing hit the big time is generally considered to be 1979. Fordism is on the way out at the moment - informational capitalism shouldn't peak for a while yet, since these cycles seem to generally last 60 years. Then it'll decline and something new will swing up, provided capitalism still exists of course.