Oct 182012

It’s not everyday we see a 10% intra-day drop in Google’s stock price but that’s what happened today when they missed analysts’ expectations. To make things worse there was a small hiccup during the earnings report process when a third party company accidentally released their profits early without permission, which caused all kinds of problems (゜o゜)  Some investors are beginning to think that the company’s advertising business, which is by far how Google makes most of its money, will not continue to do so well in the future. Sentiment was so bad today that Google contacted the NASDAQ exchange and said “Stop this madness and halt all trading activity for GOOG!” (I paraphrase of course) Their stocks were literally out of commission for most of the afternoon today, which means nobody could buy or sell their shares.

 After the initial shock has worn off the stock  started to trade again in the afternoon. Is this a good time to pick up some Google shares, or wait awhile and see if it drops even more?  I am tempted to buy some GOOG now. But I will be patient and do some research into their financials first. From an earnings perspective they are still more expensive than Apple stocks despite their $60 per share drop today.




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26 Comments on "Weekend Business – Oct 19th – Google"

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10/18/2012 11:07 pm

Thanks for the mention, have a great weekend!

10/18/2012 11:17 pm

toi aussi :0)

10/19/2012 12:49 am

Hmm. I regret not buying them when they were around $200/share but I’m half and half now. There’s no doubt that if any company is going to innovate and grow further, then it’s probably google. They employ some of the cleverst people on the planet for sure, but an awful lot of money constantly goes into other side projects like the driverless car thing. Could be massive in future, or possibly a white elephant. For my money, I’m going to invest somewhere a little more predictable, banking. Apparently, theycan’t fail…

10/20/2012 10:02 am

I heard Google gives 1 day a week for their employees to do any side project they want. If they make something cool, then Google will likely release it to the world, in Beta form of course.

10/19/2012 2:27 am

Thank you for the mention and I hope to return the favor in the near future. I have read many of your posts and I want to say you provide a great service to your readers. You pair practical knowledge with investment strategies that may be a bit foreign to others. Thanks for the service you do to your community.

10/20/2012 10:06 am

No problem. Thanks for dropping by. I like the bold fonts you use on your blog, makes it easy to read :)

Not Working
10/19/2012 3:32 am

Thanks for the mention, really laugh on your STAHP graph haha

10/19/2012 4:15 am

Thanks so much for mentioning my post! Your graph made me laugh :)

10/20/2012 10:11 am

Thanks Becky, good to know about those baking soda tips.

John S @ Frugal Rules
10/19/2012 5:07 am

Great graph! I saw the news omn Twitter yesterday about them missing targets and knew they weren’t supposed to announce until end of day. Now, they’re saying it was a “human error”. Sucks for Google.

10/20/2012 10:15 am

Too bad for Google, hopefully they can reassure shareholders about all this and not let it happen again. Mistakes are bound to happen every once in awhile when running large companies. How they handle the aftermath that is really important.

10/19/2012 8:21 am

Thanks for the mention! Google is still down a bit; do you think it will drop a bit more or will people start picking it up because it is a bit cheaper?

Have a good weekend!

10/20/2012 10:18 am

I’m going to wait a bit longer because technically the chance of it going lower is more than the chance of an upswing. But it’s hard to say. I’ll probably do a post if I buy any.

10/19/2012 2:59 pm

the GOOG move was interesting because it pushed an after hours reaction forwards. the earnings were awful! Google now facing same issues MSFT and INTC have been facing since 2000. Nobody buys GOOG for value. they buy it for growth. So if growth rate slows as business matures & potentially even turns negative, who is left to buy?? MSFT and INTC didnt find a new wave of buyers until their dividends became high enough that they became deep value/income picks.

low growth, no divs, trades at 18x, that seems rather expensive to me.

10/20/2012 10:23 am

Exactly, I’m not a big fan of investing in MSFT because they have executed their business poorly and their stock has gone no where in the last decade. 18x is pretty expensive for Google. I wonder what their average ratio is for the last 5 years.

10/19/2012 11:28 pm

thanks saw a brief mention of it on the news but didn’t really pay attention

10/20/2012 10:29 am

Normally these things would only be on business news, but this one was so big I saw it on mainstream media. Despite the big loss this week Google is still about 5% up from the beginning of the year ( ・_・)

10/20/2012 7:34 am

Crazyness, your graph is very accurate :p. I’d be tempted to wait and see if it stabilizes before jumping in, but curious to see what you’ll do!

10/20/2012 10:31 am

Most of Google’s publicly available shares are still owned by large institutions so I think it’s not a bad place to put money in the long run, but short term volatility makes it hard to time an entry point. I’ll wait for more news before deciding.

10/20/2012 11:46 am

I don’t know too much about investing on my own but I am trying to learn as much as I can so one day I can start to buy stocks. There have been many great bloggers out there that write some awesome baby step posts for someone like me learning from the bottom up and it’s where I’ve begun. Thanks for the mention. Mr.CBB

10/22/2012 10:11 pm

Stocks can be a little addicting. I found out that there are too many companies I want to buy but I never have enough money to buy all the ones I like.

Steve@The Loonie Bin
10/21/2012 12:45 pm

Thanks for the inclusion, Liquid.

GOOG is too expensive for my liking.

I’ll stick with dividends and sleep filled nights.

10/22/2012 10:14 pm

Another commentator mentioned as well how expensive Google is right now. Maybe they’ll get cheaper by the end of the year, maybe even cheap enough for you to buy :0) I predict they will eventually distribute dividends just like Apple finally decided to do this year. Maybe Google needs more time to mature first.

10/21/2012 8:07 pm

I’m not too worried about google, they are still the number one search engine by far and I think they have the ability to adapt. Have you ever used bing? haha

10/22/2012 5:18 am

it boils down to where Google fundamentally derives its revenue in its business model. advertisers will only pay Google if they continue to receive revenue generating traffic. what’s revenue generating traffic? its usually some sort of traffic that results in a purchase. even websites that rely on visitor traffic to generate advertising revenue will need some % of clickthru. thus, the main threat to Google isnt Bing, but actually Amazon. they have the ability to steal significant amount of the traffic that will buy something away from Google. you can see this already via the amount of ppl who will… Read more »

10/22/2012 10:25 pm

@Harry Haha, I’ve tried using Bing. Not use to the interface. The thing I like about using Google is they have an entire package not just for web searches, but also content creating, youtube, webmail, and a bunch of other services that are all integrated nicely. @Alex Glad you mentioned Amazon. They are a huge powerhouse and I’m scared of the valuations on their stock price. I wouldn’t be surprised if Facebook is taking some ad revenue from Google as well. With most people using smartphones in the future, the next biggest thing is who will be the first to… Read more »