House of Paine

google booble ?

   
AS A STOCK'S 
    TRADING PRICE 
  CHASES ITS OWN  VALUE  TAIL 
                  UP AND UP ....

"LIKE A  FRICKIN CYCLONE ...."

  AAHHH

the  sublime rationality 
       of 
         the bigger fool ......
   
  
  is he 
  the next guy ?
       the last guy ?

              or.....YOU ?

 AND WHEN IT POPS?

  REMEMBER 
 THE DEAD CAT BOUNCE 

          SELL ON THE BOUNCE 

===================================



" David Edwards, a financial analyst 
with American Technology Research, 
wants to believe in Google. "

"But how do you embrace a stock 
that has more than tripled
 in 10 months
 and cracked the $300-a-share barrier
 so quickly 
since going public 
that much of its growth potential 
seems already built 
into the price? "

-------- MOST ? THERES MORE ? -----------

 
 
"In early May, 
when Google was trading for $236, 
Mr. Edwards sent a note
 to clients of his firm, 
 recommending that they buy Google stock" 

"But Mr. Edwards, 
who has been analyzing 
publicly traded stocks for seven years --(SIC)---
 acknowledges that Google 
has him flummoxed 
now that it has sprinted past $300"

 " the stock continues to climb 
as if it is 1999 all over again"

 "many of edward's  counterparts,
 including those working 
for more prominent investment banks, 
continue to recommend the stock" 

Heath P. Terry
 an analyst with Credit Suisse First Boston
 predicted back in February
 when Google was trading 
at just over $200 a share
 that the stock would hit 
$275 within the year
 When three months later
 the stock crossed $277
 Mr. Terry raised his target price
 to $350
 prompting several others 
to follow suit 
in the Wall Street equivalent 
of "can you top this?" 

"Mr. Edwards, too, says he believes 
in Google's long-term prospects
 but he describes himself as 
stumped about the advice
 he should give clients 
in the short term" 

"It seems like everyone 
has jumped on the price-raising bandwagon
 which has left me sitting here
 and scratching my head," 

" He does not have the conviction
 to advise clients 
to buy the stock
 nor is he pessimistic enough
 to advise them to sell"

 "Let's just say 
if I was owning Google stock
 right now, I'd be selling some,"

 "Google
 had more than $3 billion in revenue last year
 almost all from its advertising business
, and its profits have increased 
more than sevenfold since July 2004" 

" By contrast, most of the dot-coms 
that flamed out so spectacularly 
in 2000 and 2001 never turned a profit"
 

"Yet even some of those 
who were bullish on Google 
when it went public in August, 
at $85 a share, 
wonder if investors have forgotten 
some of the lessons of the 1990's." 


"the "B" word - bubble -"

 

"The good news is this is a one-stock bubble," 

"At the close of trading on Monday,
 the cumulative worth of all shares 
of Google stock added up to $84.47 billion"

"  eBay, is worth $45.37 billion, 
and Yahoo, worth $49.83 billion. "

"Comparisons are also being made
 between Google and Time Warner,
 another company deriving
 the bulk of its revenue from advertising
 Time Warner had a market capitalization
 of $79.19 billion 
at the close of the market on Monday, 
 it posted first-quarter revenue
 eight times that of Google
 and profits about three times as large" 

The increase in the share price 
has been good for Google's two founders,
 Sergey Brin and Larry Page.
 At Monday's closing price,
 each  had about $11 billion in stock,
 excluding options. they made  $500 million 
by selling a fraction 
of their shares (about 4.5 percent apiece) 
since Google went public."

Any number of theories might explain the most recent run-up in Google's stock, which has risen 67 percent since April 1. Those range from data suggesting that Internet advertising revenue is rising by as much as 40 percent a year - a trend sure to benefit Google - to 

"a herd mentality among mutual fund managers 
 declared this spring
 that resistance is futile: 
to post the kind of returns 
that would put them 
in the upper echelons 
of performance tables,
 they need to own shares in Google"

"This is where you can say this is like 1998
when Institutions realize they can't afford
 not to be in, whatever the price." 


  -------- and like ....and like .... and like .... 
                                          caveat emptor ------------

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