Posted on 10/08/2007 3:02:48 PM PDT by Rb ver. 2.0
SAN FRANCISCO (AP) — Google Inc.’s stock price sailed past $600 for the first time Monday, extending a monthlong rally propelled by the lofty expectations surrounding the Internet search leader’s upcoming third-quarter earnings report.
The Mountain View-based company’s shares traded as high as $610.26 before slipping back to $609.62, a gain of $15.57, or 2.6 percent. It marked the sixth time in the past 12 trading sessions that the stock has reached a new peak, indicating investors are confident Google’s third-quarter profit will be impressive. The results are scheduled to be released Oct. 18.
The latest milestone served as yet another reminder of the immense wealth created since Google went public in August 2004.
The shares have increased more than sevenfold from their initial public offering price of $85, bringing the nine-year-old company’s market value to $190 billion — eclipsing bigger, more mature businesses like Wal-Mart Stores Inc., Coca-Cola Co., Hewlett-Packard Co. and IBM Corp.
It took 10 1/2 months for Google’s stock to leap from $500 to $600 and more than a year for the journey from $400 to $500. The shares hurdled $300 in June 2005 after passing the $100 and $200 thresholds in 2004.
Analysts began predicting Google’s stock would reach $600 at the start of 2006 when the shares were still hovering around $420. Some analysts already are predicting Google’s stock will hit $700 within the next year, but the average target price for the stock is $614.64 among analysts polled by Thomson Financial.
The biggest beneficiaries of the stock’s ascension have been Larry Page and Sergey Brin, who began developing their search engine, then called “BackRub,” in a Stanford University dorm room in 1996. Page and Brin, both 34, now rank among the world’s wealthiest people, with fortunes approaching $20 billion apiece.
Google’s chief executive, Eric Schmidt, and top sales executive Omid Kordestani also have accumulated enough stock in the company to become multibillionaires.
Hundreds of other Google employees are millionaires.
Google’s stock has reigned as one of the hottest commodities on Wall Street because its search engine has turned into a moneymaking machine as advertisers spend more on the Internet to connect with consumers who are increasingly shunning television, radio and traditional print media. Google’s search engine is the hub of the Web’s most lucrative ad network.
If it gets its way, Google could become an even more powerful through its proposed $3.1 billion acquisition of ad distributor DoubleClick Inc. The deal is being held up while federal antitrust regulators review complaints that the acquisition would give Google too much control over online ad prices and personal information collected from consumers.
The recent enthusiasm surrounding Google’s stock contrasts with a more subdued mood in mid-August, a few weeks after a second-quarter earnings report lagged analyst projections. Google’s stock dipped below $500 then.
Heartened by recent data indicating Google has widened its lead over Yahoo Inc. and Microsoft Corp. in online search, investors are betting the company’s third-quarter results won’t disappoint.
Analysts, on average, are expecting the company’s earnings to rise by more than 40 percent to $3.75 per share, excluding expenses for employee stock compensation, according to Thomson Financial. Google’s earnings have topped analyst projections in all but two of its 12 quarters as a public company.
Lifted by more positive sentiment, Google’s stock has surged 17 percent in the past month to create an additional $28 billion in shareholder wealth. For the year, the shares have climbed by 32 percent, outstripping the stock market’s major indexes.
Thanks, I will now short it!
Go ahead, I own GOOG since $96. Yay!
yeah...just like everyone else.
Notice how the people who rode it up now refuse to sell it. The same kind of greed as preceded the Internet bubble burst.
AT&T or Google? Ahhh. Tough decisions.
short away ... google has real earnings , owns their category and is expanding their franchise... shorting based on nothing but a high price is foolish ,,, while you’re at it why don’t you short T and GME also?
short away ... google has real earnings , owns their category and is expanding their franchise... shorting based on nothing but a high price is foolish ,,, while you’re at it why don’t you short T and GME also?
short away ... google has real earnings , owns their category and is expanding their franchise... shorting based on nothing but a high price is foolish ,,, while you’re at it why don’t you short T and GME also? ... :^)
It it does really drop, it will drop like a lead brick. 400 or 500 points in one day might be an stockmarket record.
Does anyone have any ideas on why IBM is cozying up to Google with this “Cloud Computing” initiative? Is something bigger going on, or is this just a typical joint venture?
BTW, why don't they split their stock so that the eventual collapse won't be so dramatic?
All you currently own is the name "Google" that was generated over the last 10 years! How foolish! It doesn't take a nostradamos to see bad bad things in Google stock holders futures... or, at least the ones who sell late.
It’s time to buy!
Don't they have a common enemy?
#1 Google doesn't have a union milking it
#2 Has pretty low over head & high gross margins
#3 Doesn't have to worry about commodity prices skyrocketing.
#4 Simply dominates the market. Delta was #1 but didn't come close to dominating it's field like Google currently does.
It's trading at about 33X 2008 earnings and and 22x 2009 earnings--and that's if it it doesn't outperform like it has usually. Google is the next Microsoft and it's stock price will level out soon and probably stay there for several years but to say it's a definate sell isn't looking at the figures closely.
Good analysis! Now, what do you think of Baidu.com (BIDU) stock? The next Google? Do we buydu now or do we buydu after a few more pullbacks? (I’m sooooo funny! hahahahahahahahahahahaahahahahah! ....ahem.....)
Wouldn’t touch that stock with a 10 foot pole. It’s trading at 88x next year’s earnings.
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