Google Dives

Of course everyone has heard by now that Google’s shares dropped about 9% today. I had heard earlier that their stock had dropped 19% in after-hours trading, but settled back to 12%, then 9% today:

Google shares fell 12 percent in after-hours trade to $379.00, slicing roughly $15.3 billion from a market capitalization that had stood around $126 billion. To put that in perspective, the decline represents the entire market value of Gannett Co. Inc. (NYSE:GCI – News), the largest U.S. newspaper chain.

Wow. Well not everyone is buy buy buy:

“It would be fair to say that the bloom is off the rose,” said Stifel Nicolaus analyst Scott Devitt, who issued a rare “sell” recommendation on Google stock this month. “Google remains a great company. But there is a disconnect between the business and the market capitalization.”

It looks like there are only 2 analysts labelling Google as a sell. It’s 29-8-2 (buy-hold-sell). Actually 29 out of 31, that pretty much IS everyone. Here’s what a friend wrote to me thing morning:

Watch Google crash…they missed fourth quarter earnings estimates by a mile. It’s the first sign of adversity since the IPO. The stock already lost 9.05% at the time of this email. People will probably forget about this in a couple of days when someone on Wall Street announces that “despite poor fourth quarter performance, Google remains ‘a great buy’.” Everyone will then start dumping money in again. The daily press releases from Wall Street seem to be what drive the “Bulls.” Google is a great present day example of the “psychology of investing.”

It’s also a typical example of irrational exuberance and of history repeating itself.

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