Google’s stock, after reaching an amazing all-time high closing price of $741.79 on November 6, has been in free-fall ever since, dropping 109 points in the last four days of trading. Clearly, a lot of investors and insiders were pleased at the chance to sell high, and did so, sending the stock down over 15%. Today was the first positive day, hopefully the end of that terrible trend, with the stock rising $28.48, or 4.5%
GOOG fell over five percent today, losing $39.10 real fast. The stock is off 5.3%, 5.75% over the last two days. Then again, it only lost less than two weeks of gains, so it looks like all the people who made a lot of money off Google recently decided to pull out. Still, $50 billion of market cap just vanishing? Never a good thing.
InterActiveCorp, the internet conglomerate assembled by Barry Diller, is breaking up into five seperate companies following pressure Diller’s backer, John Malone. Barry Diller is following the most important piece, the new IAC, which will be mostly the Ask.com corporation, meaning Ask.com, as important as it was before, becomes the central focus for the company, great news for Ask fans going forward.
The IAC unit will basically be Ask.com, plus Citysearch and Match.com. Being spun off are HSN (Home Shopping Network), LendingTree, TIcketMaster and Interval International (a vacation time share business). Shareholders are happy, sending the stock up 7.5%, since they’ll get shares in the four new spun-off companies. The new company will be far less complex than the old IAC, with the focus being understandably on Ask and search, and if you ask me, that’s a very smart move.
Valleywag is of the opinion that the news that a major multi-billion dollar conglomerate was breaking up was much bigger news than Google’s non-phone announcement yesterday. If the internet media (which has just been embarrassing the last few days) stopped going nuts over every shiny non-news that comes along, they might even agree.
Meanwhile, Ask.com solidified its biggest revenue stream for the future, re-upping its deal with Google to carry Google ads on Ask.com. The new deal goes five years and will bring in at least $3.5 billion.
IAC’s Media & Advertising group, the division that includes Ask.com and the rest of IAC Search & Media (plus CitySearch and Evite) had a great quarter. IAC reported earnings yesterday, and while the company as a whole didn’t do great, with profits down 4.2%, Ask’s division had revenue of $189 million, up 40%, and income of $27.6 million, up an impressive 74%. The growth is great, and though they aren’t Google-level numbers, profitablility comes first, then big growth, then billions in earnings. At the very least, the money means Ask should be sticking around for a while.
Remember how Google stock brock $600 on October 8, and I said “Looks like Google might reach $700 in a year, maybe two”. Wow, was I wrong! It took GOOG just 23 days to surpass $700, a level it started yesterday at and never fell below, resulting in a market cap over $220 billion. If not for Microsoft’s huge increases lately, we’d be talking about Google’s chances at catching Microsoft and becoming the bigger tech company.
Look at what this does to my chart!
The old chart was so smooth:
Jeez, talk about your meteoric rises. Google stock’s milestones:
Google cracked $700 yesterday, 10.31.2007
It reached $600 on 10.8.2007.
IPO @ $100: 8.19.2004
In pre-market trading the stock was down $4-5, probably a lot of investors looking to lock in their profits.
Google is now the fifth-largest company in the U.S., beating out Proctor & Gamble, Bank of America and Citigroup in just the last few weeks. Up next: AT&T, $30 billion away, and Microsoft, $120 billion ahead.
Just so you know, in mid-2006, when Windows Vista was delayed again, Microsoft’s stock dipped low enough where it was worth less than Google is now. So it’s possible.
GOOG hit a per-share price of $666.66 yesterday and multiple times today, proving that Google owes its success to the devil. So close to Halloween? It can’t be a coincidence!
Google bucks the odds again, somehow managing to beat the highest of all expectations. Their latest earnings report is in, and it’s a nice one. The short:
- Revenue: $4.23 billion, up 9% over the last quarter and 57% over the third quarter of last year.
- GAAP operating income: $1.32 billion, 31% of revenue, up from $1.1 billion and 29% the previous quarter. Non GAAP: $1.52 billion and 36%, up from $1.35 and 35%.
- GAAP net income: $1.07 billion, up from $925 million. Non-GAAP: $1.24 billion, up from $1.12.
- GAAP earnings per share: $3.38. Non-GAAP: $3.91
- Traffic Acquisition Costs: $1.22 billion, 29% of ad revenue.
- Stock-based compensation: $198 million, reduced from $242 million.
- Google Site revenue: $2.73 billion, 65% of total, a 10% increase.
- Google Network (AdSense) revenue: $1.45 billion, 34% of total, an 8% increase.
- Paid clicks: Up 5%.
- AdSense payouts: $1.22 billion.
- Other cost of revenue (data centers and credit card processing): $441 million, up from $412.
- Income tax rate: 27.3%, up from 25.5%.
- Cash flow: $1.63 billion, up from $1.23 billion.
- Cash on hand: $13.1 billion.
- Employees: 15,916, hiring 2,130 new Googlers in 3 months.
- Non-advertising revenue: $41.9 million, up from $26.7, but still just 1% of total revenue.
So, great numbers, other trends remain the same. AdSense growth is slowing, becoming a less important part of Google. Google keeps hiring (overhiring, maybe). Non-advertising revenue is non-existent.
The stock market is reacting positively. Shares are up mildly in after-hours trading, up a total of $9.52 on the day (about 1.5%). Not a great reaction (maybe they’re bored of Google?), but the stock is flying so high these days, it doesn’t have much of where to go. Google market cap is almost exactly $200 billion right now, an all-time high.
Yahoo finally had a decent quarter, releasing third quarter earnings that didn’t immediately inspire panic among investors. Yahoo’s earnings, with $1.77 billion in revenue, $150 million in operating income, $1.02 billion in gross profit, sent shares up 7-8% most of this morning. While shares are well down from where they were a few years ago, or even from the first half of this year, they have been rebounding lately, up 25% in the last seven weeks.
You can’t do a big post on this every day if it keeps happening, but it’s certainly worth mentioning that Google rose another ten bucks to close at a new record high of $625.39. After hours trading pushed the stock even higher, all the way to an even $632, with a share selling at the highest ever price of $633 just forty minutes ago. Crazy times.
Google stock shot up fifteen dollars today, breaking a new all-time high over $600 for the first time ever. The stock may have hit some rough patches for most of 2006 and the first half of 2007, but it seems to do real well closer to the end of the year. Buying it now may still be a decent idea.
Google cracked $600 today, 10.8.2007.
It reached $500 on 11.21.2006
IPO @ $100: 8.19.2004
Looks like Google might reach $700 in a year, maybe two. Don’t be an idiot and predict GOOG $2000, but GOOG $700 could be imminent, if you have patience.
GOOG, the stock of champions, once again smashed its old record, reaching as high as $560.58 at 3:28 on Friday, recording a market cap of about $175 million. As Barron’s points out, Google’s stock is close to being bigger than Wal-Mart, even though Wal-Mart’s revenue is more than 30 times Google’s ($377 billion to $11 billion).
(via John Battelle)
Google stock has plummeted on what the market is calling a bad earnings report, falling over $46 in after-hours trading. GOOG fell from a closing price of $548.59 to around $502.47, an 8% drop that wiped out $13 billion in shareholder value.
Reuters called the earnings report “disappointing”.
Jeffrey Lindsay, analyst at Sanford C. Bernstein, says Google is blowing it on expenses, spending too damn much money. “These guys have been spending like drunken sailors.”
Google CEO Eric Schmidt, displaying an incredible amount of arrogance or insularity (pick one), acted in a statement like Google didn’t slip at all. While yes, the market is over-reacting, it is still reacting to a down quarter, and to not notice that it was a down quarter is just stupid.
Google’s stock has been rallying, rising unstoppably since mid-May (up $82.51/17.87% since May 15) all the way to a new all-time high. Today, at 9:40 am, it hit $547.66, although officially it had a high of $548.74 at some point. The market cap is flirting with $170 billion at this point, putting it well above IBM ($161 billion) and just shy of Berkshire Hathaway ($171 billion) and Cisco ($172 billion). Google is now among the 25 largest companies traded in the U.S..
Google’s stock might be finally hitting a sunny patch, having risen $70 in the last six weeks and reaching a new all-time high. The stock, which used to be talked about as a high-flying stock, has suffered since January of last year, having trouble rising as recently as mid-April, but is now going up in value. The stock hit a new all-time high of $534.99 around 1 pm on Monday, currently enjoying a market cap higher than $164 billion.
Could Google be recovering? Is GOOG finally a good buy? Is it too early to be talking about $600, as this guy is? Seems like the Wall Street consensus is $600 in the next twelve months, which would mean 2007 could actually be an up year for Google’s stock, unlike 2006.
This August, it will be three years since Google’s initial public offering (and since I started this blog as a way to track the company). When that happens, according to NBC News, nearly 3 billion dollars in pre-IPO options will vest, with over 450 early Googlers earning an average of $6.5 million. These are quality employees, many of whom are responsible for Google’s early growth, and they will instantly receive the option of becoming millionaires and leaving the company.
Google isn’t the first company to have this kind of success. Microsoft’s stock turned a lot of workers into enormously wealthy people (there was always the joke of the millionaire secretary), and it cost the company some quality people. Google is going to lose a lot of employees, some of which have been biding their time waiting for their shares to vest, and those employees will leave and actually leave the company stronger. Other employees love working at Google, but will be distracted by the money and stop producing as well as they have.
Still, there will be employees who would never leave Google, but understand that it would be stupid to not cash in those shares. For all we know, Viacom could win its lawsuit against Google, and several lawsuits later, that stock will be worth a whole lot less. They’ll sell it all on day one to guarantee their financial security. Being millionaires, they might leave their jobs (which apparently pay less than similar jobs at Microsoft), or they might stay, but the sale of several billion dollars of shares will severely impact the stock.
On the anniversary day, I suggest preparing for a nice dip in the stock. Nothing terrible, but a ten-dollar drop wouldn’t surprise me.
Douglas McIntyre reports that two consulting firms have analyzed Yahoo CEO Terry Semel’s compensation package and determined that Yahoo shareholders should consider revolting. Yahoo’s pay compensation committee has been showering Semel with money, giving him
at least anywhere from $1.08 billion to over $800 million in stock grants over the last six years. Last year, $107.5 million in stock grants was given to Semel in lieu of a $1 salary, a year in which Yahoo stock dropped about 35%. That means he was paid $107.5 million for erasing over $15 billion in shareholder value!
Why is he getting so much money? Google’s founders don’t receive any extra stock, and they are paid $1, so they are working purely to make the company more valuable. Meanwhile, Yahoo’s boss doesn’t have any incentive to make the company more valuable, because he gets paid $100 million a year no matter how bad a job he does. Why does he still have a job? Wouldn’t Yahoo gain so much with a lower-paid CEO that the firing of Semel alone would improve their earnings?
UPDATE: Yahoo shareholders voted significantly against the current slate of directors at the annual meeting, but not enough to get them removed. Hopefully it will send a message that enormous compensation without results is not acceptable.
Google held its annual shareholder meeting last Thursday, and the AP reports that Eric Schmidt reiterated Google has no intention to issue a stock split now or anytime in the future. The no-split stand has been around as long as Google’s stock has, with the company intending to keep a high-priced stock, much like Berkshire Hathaway does, in order to avoid instability.
Of course, Google’s stock hasn’t been doing well for a while (it’s up one dollar, or .23%, in the last 16 months), so some hoped Google would change its mind. Considering how high Google is valued as a result of its stock (market cap of $145 billion), don’t be surprised if the stock doesn’t move until the company gets closer to its well-deserved high-flying expectations. Microsoft stock is currently about 6 times earnings, while Google’s is 14 times, so you can see the gap until Google is actually worth what people paid for it.
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