Google stock takes a dive

By Derek Sooman on February 1, 2006, 3:38 AM
Due to the company's missing of analyst's expectations for the fourth quarter of 2005, Google's stock dropped more than $70 from $432 into the $350s. The drop briefly eliminated more $20 billion of Google's market capitalization of about $127 billion, before recovering slightly. At the end of last year, Google reported total revenues of $6.14 billion, an increase of 92.5% over revenues of $3.19 billion in 2004.

CEO Eric Schmidt told analysts during a Tuesday conference call that the fourth-quarter results topped the company's internal projections.

"We are very pleased with the performance on every level," he said.

Google's management has steadfastly refused to publicly project its earning potential, making it difficult for analysts to reach the calculations that investors use to appraise a company's value.

User Comments: 9

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JMMD said:
I saw this last night when I was checking stocks. It's amazing how the market can turn on a company. It will be interesting to see how the average Google investor reacts when the market opens this morning. Insiders and institutions hold about 73% of the shares.
Need_a_Dell said:
This is a little odd. Google has a ton of plans to expand in the future and it seems strange for their shares to plummet so far down when they're about to incorprate a slew of new features and services. (I had heard rumours of a Google phone service and a Google ISP.) Fingers crossed for the internet giant.
barfarf said:
This would be a good time to invest in google. I bet the lost in stock price is short term dip and should move back up quickly. This is what i call an easy swing trade. Like the other users said google has too many good thing to go for it to worry about dips like this.
exscind said:
The market is very fickle, and this is but an example. Personally, I think it's good that Google takes a dive once in a while as a reminder to everyone, but mostly to themselves, that nobody is infallible. $350 per stock is still one of the highest in the market, so the damage isn't as devastating as some may think. Hopefully Google will take this lesson and imprint it dearly on their walls.
MonkeyMan said:
WOw, now that is some major cash!!! I never knew that Google was such a monster!!!!!! with the economy going up and down, the market is a little shaky, but I think Google will recover, just think positively Google!!!!
nathanskywalker said:
Yeah, i saw something on this...Oh well, could have to do with previous mistakes...negative propoganda...But they'll be fine, that was a little drop, google will recover soon enough. Just, hopefully this doesn't slow theyre coming out with a linux opperating system.....and of course, there are differring opionons on why google took a little slide...[url]
Race said:
It's amazing how little it takes to swing a stock, or the market in general.With Google's stock trading at such high multiples.....95 times this years earnings, and 49 times next years earnings, the slightest glitch or negative news triggers a selloff like this.I've seen a couple of analysts on CNBC recently, who according to their financial models of Google, have fairly valued the stock at $254 and $260. Apparently, not many are paying attention, which is probably because of Google's policy:[quote]Google's management has steadfastly refused to publicly project its earning potential, making it difficult for analysts to reach the calculations that investors use to appraise a company's value.[/quote] Expectations with Google are very high, and when a stock this expensive misses it's numbers, it's the 'momentum' investors who are the first to get out.(Looks like it closed back above $400 today)
gamingmage said:
Wow, poor google...just kidding. I know they will come back with ease.
buttus said:
It's simply amazing.How can anyone...after loosing 20Billion dollars...turn around and say"We are very pleased with the performance on every level," ?Geez.I loose a $20 bill and I am PO'd for the rest of the day...
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