Slashdot Mirror
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."
Google may indeed have a hard time ahead of it, especially legally. It's legal bills are certainly going to be a large amount of their budget. Personally, Google scares me - they're a giant, and they succeed at almost everything they do, and what's almost worse - they usually have good products. This sounds good, but it just means they're entering more and more arena's, as the article says, and what happens when one day they control everything?
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.
-Daniel
I'm not an investor or broker so perhaps someone can explain this to me while I furrow my brow in a vain attempt to understand the situation.
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...)
And All I Ask is a Tall Ship And a Star to Steer Her By
The stock price took a hit yesterday because Google didn't meet analysts' *quarterly* expectations. BFD. Anyone that's not in the stock market for the long run, please do us all a favor and leave. The following exerpt from an AP article this morning sums everything up:
"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.
Bill Clinton: Pimp we can believe in. - The Shirt!!!
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.
I'm not an investor or broker so perhaps someone can explain this to me while I furrow my brow in a vain attempt to understand the situation.
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.
I've got a brilliant business idea based on this. Basically, I want to move a step or two ahead in the predictions game. Fittingly inspired by google - meta-analysis:
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.
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.