The cataclysm that hit global markets over the long weekend has affected technology darling Google, which has seen $16.15 billion shaved off its market cap since closing at $600.25 per share on Friday.
Today the shares fell to change hands for as low as $519 before recovering somewhat to end the session at $548.62. Analysts at Citi issued a note pointing to a deceleration in its growth (based on comScore data), tenuous ties to the plummeting shares of Apple (they both get called tech darlings a lot in the media), and a slowdown in its paid click growth.
Of the three I’m going to vote on a slowdown in advertising as being a good reason to sell, although the lemming thesis involving Apple is more fun to write about.
13 comments so far
6:22 PM PT
What about the lemming thesis that drove GOOG to close to $750 in the first place? The day it hit what could be the all time high, there were posts all over the blogs (i’m looking at you techcrunch) that gushed all over GOOG and how it would take out $1000 then $2000 in the near future.
6:45 PM PT
Google’s U.S. Paid Click growth for Q4 — 8% Q/Q, which marks a surprising deceleration from the 11% Q/Q growth that comScore reported in Q3.
I guess, this is because they fine tuned the click-able area of the advertise to the Title and URL in a Text Advertisement. It was a move to reduce click-fraud, we’ll know on the 31st.
7:10 PM PT
Stacey,
Google wasn’t sustainable with any technology P/E north of16 - 18 max. Google is a GREAT company, but irrational exuberance had set in amongst investors of GOOG months ago.
Same can be said of Apple. End result - correction.
8:13 PM PT
Google shares will be further hit as and when EU starts anti trust proceedings against the Doubleclick buy.
8:14 PM PT
(link)
Forgot to add my signature above :D
9:29 PM PT
The cycle for Goog is due for negativity from all corners - overexposure in the media, a few less than popular moves, ad revenues being hit (though not comparatively). The pendulum should swing much lower for Goog, but the smart betters will know to buy shares in the trough…
1:34 AM PT
Check out AMZN shares - they show a similar decline over the same period of time - 96 -> 74.
Given the overall slide in tech stocks, perhaps it’s just a market-wide decline?
4:04 AM PT
Several NASDAQ stocks will go to zero as commercial paper goes bad. If you don’t know what I am talking about, it is time to sell.
8:22 AM PT
Descending GOOGS share - wast it inevitable?
9:08 AM PT
“The pendulum should swing much lower for Goog, but the smart betters will know to buy shares in the trough…”
–same principles as what is taught several times before… buy low, sell high… buy when people sell and sell when people buy
“Given the overall slide in tech stocks, perhaps it’s just a market-wide decline?”
–it was… so why be concerned for GOOG itself right?
i bought more shares of apple and google yesterday. short term lose, long term gain.
10:41 AM PT
Never been a better time to buy in people. Buy now and sell off when they peak again after dropping their new Social Networking site.
8:20 PM PT
I was right in predicting as to why earnings will take a hit.
Without providing details, the executives said Google made the change to decrease the frequency of “accidental” clicks on ads.
(link)
7:01 AM PT
Actually, the EU looks like its going to be allowing the doubleclick buy, much to Microsoft’s chagrin. So the fears about anti-trust proceedings will most likely not be an issue. Granted, they would have no right to start proceedings anyways, they would just deny the acquisition.