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Google Shares Drop Under $400

 5:05 pm on Sep 29, 2008 (gmt 0)

SAN FRANCISCO (MarketWatch) -- Google Inc. saw its once high-flying share price fall under the $400 mark by midday Monday. This represents the lowest price for the stock since September of 2006, when the shares were still on a sharp upward climb following the company's initial public offering two years before. The Web search giant's stock peaked near the $750 mark in November of last year before a sharp sell-off in high tech stocks began to pressure the shares. By midday Monday, Google traded as low as $395.34, down 8% from its previous close, following a sharp sell-off in tech stocks as well as the broader market.

Google Shares Drop Under $400 [marketwatch.com]

[edited by: engine at 5:16 pm (utc) on Sep. 29, 2008]
[edit reason] added quote [/edit]



 5:39 pm on Sep 29, 2008 (gmt 0)

Great. This is all I need to hear! I still believe it has a lot of potential and investors should hold onto the stock for the long haul. Look where Berkshire Hathaway was 15 yearss ago compared to its value today. Arguably, they are two completely different stocks with different agendas, but I don't see Google slowing down anytime soon. This is just a bump in the road. Would you buy a TV when it's full price, or on sale?


 5:58 pm on Sep 29, 2008 (gmt 0)

It's kind of hard to pass judgement on any single stock today. There was a 400 point swing down and 300 point swing up for the DJIA in just a matter of minutes.


 7:26 pm on Sep 29, 2008 (gmt 0)

It is hard to take the stock market seriously in general. I moved most of my investments out of the stock market years ago...

Too many day traders swayed by the daily catastrophic news reports...


 8:07 pm on Sep 29, 2008 (gmt 0)

a few years ago ..a couple of us here said ( down in foo I think it was ) "move it into gold" ..that the "finance" - "money" - housing" bubble would burst ..and there would be major pain..

most people said we were totally wrong ..
or gold brokers :)

we were neither ..just had working BS meters ..that hit the red line everytime we heard a banker or a realtor or a commodity broker or energy/petro person speak..

BS meter is still hitting the stops hard enough to bend the needle ..glad the proposal got thrown out ..


 8:13 pm on Sep 29, 2008 (gmt 0)

Yeah, can't give it much credit today... DJI just went from -620 to -748 in a matter of a couple of minutes. NASDAQ currently off 199. Everybody's losing today...


 8:39 pm on Sep 29, 2008 (gmt 0)

Wow.. Google ended up losing 10.68% today. Ouch.


 8:45 pm on Sep 29, 2008 (gmt 0)

>>>I don't see Google slowing down anytime soon

Statistically, stock pickers, market timers, and manager pickers all do equally well over time.

And statistically, they all do as well as a monkey throwing darts at the WSJ.

There's entire volumes published on showing this to be the case. There's also entire volumes published showing why people still completely ignore the evidence :).


 9:53 pm on Sep 29, 2008 (gmt 0)

Most other stocks are on their way down, some justifiably so, others not, so this doesn't tell us much. With a belt-tightening inevitable the high-overhead media businesses will feel more of a squeeze than the modern ones. G certainly isn't past its prime despite a few gripes here and there (show me the viable competition: I'd be happy to stand corrected). The best time to buy might not be today, but it will likely be fairly soon IMO, and I wouldn't be at all surprised if it doesn't top out at well more than $750 given some recovery time.


 11:22 pm on Sep 29, 2008 (gmt 0)

Google actually closed at $381.00 with a P/E of 25.03. The average U.S. equity P/E ratio from 1900 to 2005 is 14. Google = overpriced stock.


 5:53 am on Sep 30, 2008 (gmt 0)

Good. Very good. Agree with frontpage that Google is still way overpriced. Maybe a P/E of 20 might be OK, but it remains to be a high risk stock. They are still a one-and-a-half trick pony (text ads on search, and 3rd party websites) fully depending on ads. They do not have alternative revenue sources. And their range of products that do not earn any money is huge (20? 30? 40?).

Google should grow up and focus on the three or four products that can make them money (aside of advertising), and get rid of the rest. This, of course, is a difficult step and will also require them to listen to the customers and partners. I don't think that this will happen anytime soon. So the stock will plummet further. Which is OK for me. :-)


 2:54 pm on Sep 30, 2008 (gmt 0)

Right now Google is back to $409.


 5:03 pm on Sep 30, 2008 (gmt 0)

P/E has nothing to do with stock's price. Stock's price is pure speculation.

How can one compare Google to Berkshire Hathaway...oh where to start...a company (berkshire) that owns hundreds of other companies in so many industries it is virtually indestructible...to a single-horse wonder (google) which can loose 50% of its income overnight if one clever kid comes up with an exploit that will knock out IE's javascript ...not to give someone any ideas


 8:38 pm on Sep 30, 2008 (gmt 0)

$341 right now.


 8:47 pm on Sep 30, 2008 (gmt 0)

$341 right now.

Early reports is that this is some kind of data error. We'll see how it shakes out.


 9:01 pm on Sep 30, 2008 (gmt 0)

wow. lots of weirdness with Google at the bell today.


 9:39 pm on Sep 30, 2008 (gmt 0)

"We'll take a look at the trades and make a judgment as to whether there were erroneous trades," she told Reuters, adding it was too early to know whether trades would be broken.

Reuters Story [reuters.com]

In a statement, the exchange said it will cancel all trades on the stock at or above $425.29 and at or below $400.52 that were executed between 3:57 and 4:02 Eastern

NASDAQ cancels certain trades on Google shares [marketwatch.com]


 9:58 pm on Sep 30, 2008 (gmt 0)

Right now Google is back to $409.

LOL. Google closed at $320.50 or down $60.50 today. Conventional wisdom is that it is way overpriced.



 8:52 am on Oct 1, 2008 (gmt 0)

Google actually closed at $381.00 with a P/E of 25.03. The average U.S. equity P/E ratio from 1900 to 2005 is 14. Google = overpriced stock.

P/E isn't the only variable to assess the value of a stock. If earnings grow by 35% per year, a P/E of 25 means "dirt cheap". Do the math: if the growth is sustainable after 5 years the P/E will stand at 7.8 (if the stock doesn't move) - or the stock will have doubled or more in the meantime.

If earnings don't grow or even shrink in the years to come .... some more air might come out of the stock.

It's hard to tell who's right, so let's wait and see :-)


 9:18 am on Oct 1, 2008 (gmt 0)

I've heard its a data error


 11:37 am on Oct 1, 2008 (gmt 0)

Cnn Article [money.cnn.com]
"A market participant sent in a large number of orders and drove the price down at approximately [3:57 p.m. ET] which caused the bid-offer to be artificially low due to their mistake," according to a Nasdaq spokesman.

Google's (GOOG, Fortune 500) official closing price will be adjusted to $400.52 from the original, inaccurate settle price of $341.43. And the closing value of the Nasdaq 100 Index will be changed to 1594.63.


 12:33 pm on Oct 1, 2008 (gmt 0)

@ the_Nerd

Another way to assess a stock is evaluate it's price versus cash flow.

Last quarter Google had $1.7 billion of operating cash flow or around $7 billion per year. This means that Google trades at about 18-19 times cash flow right now which is a huge amount in an economy that is seeing massive slashing of advertising budgets.


 4:21 pm on Oct 6, 2008 (gmt 0)

$400 now seems like the "good ole days"...


 5:53 pm on Oct 6, 2008 (gmt 0)

$360 and falling now. It'll probably be one of the best long term investments, particularly if it keeps falling and you can get it in the $200s. If they hadn't setup that funky ownership structure, MSFT might be able to snap it up it the stock price kept falling.


 9:35 am on Oct 7, 2008 (gmt 0)

We may be seeing a whole page 1 of Adwords soon then ;)


 1:55 am on Oct 9, 2008 (gmt 0)

is it really gonna drop below $300? cause its definately heading that way!


 8:11 pm on Oct 9, 2008 (gmt 0)

The problem is that people might become nationally afraid of leverage. And it's leverage that made our stock market go so high. Without leverage in the future, we may not hit those highs for quite awhile, at least not until people forget how risky it all was.

Which, given the short attention span of certain groups of people, might not be that long. :)


 12:21 am on Oct 10, 2008 (gmt 0)

Look for Google in the $200's in near future.

With Google insiders selling shares, analyst downgrades, speculation about Google's upcoming October 16 earnings being below expectations; there will be much shareholder pain.


 11:36 am on Oct 10, 2008 (gmt 0)

Look for Google in the $200's in near future.

Yep. The GOOG party is over.

Those who were in since IPO have probably sold either at the peak, or later at $500 or so. Now, all the long-term investors are selling as they understand that the ad market is going through challenging times (not 1st half, but 2nd half 2008), and the financial crisis tightens up the money sources across the board. The pro's definitely know when to jump ship.


Sorry, I could not hold back this smilie. This is "The Return of The Dotcom Bubble".


 4:51 pm on Oct 10, 2008 (gmt 0)

Also, please note how Google has not once paid dividends to their shareholders. Not once:


Soooo, shareholders have only one way to earn money with GOOG stock - by selling higher than they purchased, which is fine in a bull market (but difficult in a bear market). So you need to find the next stupid person to sell your GOOG stock.

And if you think the shareholders can actually change this, think again! With Sergey & Larry & Eric holding 10 times the voting power of ordinary stock, they can control the company as long as they wish.


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