Google Nears $400 - Completes AOL Deal, Files to Sell More Stock!


Google's stock has rebounded strongly since the S&P 500 inclusion announcement (going from about $340 to $395 in under a week). With already 8 BILLION dollars in the bank, Google just filed to sell 5.3 million more shares, which may add another 2.1 billion to the cash hoard. They also announced they completed the AOL deal.


Ooooh! Me First!


That's a lot of 7up. Good for them. The nice thing about having that much cash and also having good cashflow is that they've still got the opportunity to do something else spectacular.

Vote of No Confidence by GOOG

All those "second IPO" brokerages that bought millions upon millions of shares at $410 were sweating their socks off when they saw it go to $330 in less than 60 days and with nothing but bad news upon bad news (such as 50% of GOOG profit stemming from click fraud !!). Schwab said it could fall to $150 by July, we're crying out loud (that was just the 25th).

No, the S&P 500 thing was calculated just to raise it high enough that the second ipo'ers could disinvest w/o losing their wallets...It's $400 today; most firms need it to get to $410 b4 they can dump it; dumps this big generally always happen on Fridays as by Monday afterhours has taken away the rest.

If you're a GOOG employee who has received stock options instead of raises for the last X years, and you cannot sell your stocks for equity until you resign, what would you do? See the writing on the wall and quit when your stock is worth $300, $250 or stick around till it's valued around Yahoo's at $50?

Hmm... As I've been saying for the last 15 months, the GOOG hegemony is a house of cards and I suspect the landscape to be far different in 2008.


Nice too see some one that does not have "rose colored Google glasses on". I agree 1000% with your view of Google. Also, I think that both Microsoft and Google are leaving the door "wide open" for ALL has to do is NOT and try to be "everything to everyone" like both Micosoft & Google.(BTW: Microsoft is/has proved this stragey of being "everything to everyone" is very faulty...yet Google is walking down the same path, right behind them.) If just strives to become what google was about 2-4 years ago and JUST provides a simple and easy to use search engine with GREAT results, they will hit not just a "home-run" in the next 18-36 months...they will hit a "Grand Slam!"

Microsoft, has proven over and over again that a "software" company cannot try and pass itself as a "search engine" company trying to promote and market a search engine with the aweful name like "MSN Search... even if they end up having the most accurate search results down the road. And I think Google will end up proving that a "pure" search engine company can not become a WIFI provider,software,email,book publisher,mobile,tech,perpetual beta,, without loosing its search engine business to a company that JUST does search.

This might be a little more than 2 cents worth...but its just my 2 cents...LOL


Monkey see, Monkey do...

ALL has to do is NOT and try to be "everything to everyone" like both Micosoft & Google

Can't compare ASK to Goggle, MSN or Yahoo, since ASK is just one "thing" of the "everything to everyone" that is IAC.

Hi Kirby,

Hi Kirby,

Yes, I know is owned by IAC. But IAC is not out promoting like its just another part of IAC. No one associates with its parent company, it is pretty much a 100% stand alone search engine company. Micosoft is a totally different story with the focus always being on their precious brand name Microsoft or MSN. Only problem with that is the Microsoft and MSN names are brand names for a software company and will never be associated by the public as being a search engine comapny. Microsoft did "to good" of a job of branding their company as a software company for anyone to think of them in any other way.

Meanwhile, Google trying its hardest to be known as something else other than just a search engine. I am not a big fan of right now, but it just seems they are in the best position currently to gain the most from the big 2 SE's mistakes.(Yahoo is also a beneficiary of Micosofts & Googles madness to be "everything to everyone") Who knows, maybe a new shooter will appear in the next 18-48 months and take a huge portion of the search engine market from them all.

Google & Microsoft are and will be great success storys, but Micosoft is just going to be a great success as a software company and Google just might end up being a great international conglomerate success story with the search engine business just being a very small part of their business in 5 years.

This would/is creating a big opportunity down the road for someone thats just happy being a pure search engine. Something kinda like Google 2-3 years ago...accept better would do just fine. And by better, I mean great search results, NOT 3,543.9 things in "perpetual beta"...LOL. BTW, has Gmail reached its 2 year " Were still in beta anniversary" yet?

I use google search, because I think its search still functions better then all the others. But if a SE like ASK comes up with a search engine I like. I would do all my searches there. Plain and simple. I am not interested at all in Googles or anyone elses "bells & whistles" (except Adsnense of course...LOL)

I feel now like I am a "member" of Google because I have a gmail account...and I just do not like that feeling at all.


Markets open in 20 min

Expect a lot of speculation. I mean, the stock tanked several dollars after hours just by mention of this no-confidence vote. However, today I read that GOOG is the most heavily traded stock in the entire world right now.

That means, more money changes hands in the form of derivates (bets on stock performance that can be traded themselves; e.g. shorts and puts) and buying and selling GOOG stock than any other speculation on Earth right now. Somewhere along the line of


is traded in GOOG, mostly in the form of derivates. That is the equivalent of 1/3 of the US GDP. I fear this meltdown may be an economic collapse in and of itself.

To put it into even more damning perspective: When goog fell from $430 to $400 in a single day back in February, the NASDAQ posted 2% losses overall; almost all because of GOOG.

...It's $400 today; most

...It's $400 today; most firms need it to get to $410 b4 they can dump it; dumps this big generally always happen on Fridays...

are you predicting that tomorrow google's stock is going to crash? i gotta go call my broker fast.

Stock Calculus

OK I'm not an economics major; however, I do make the vast majority of my earnings via wise investment and my portfolio averages 320% returns on yearly investments. I also have studied in great detail the economic theories of a very wise man whom I will not mention for you will immediatley associate him with whacky politics (his newer vocation) of which I believe he is thoroughly incompetent.

Let's take GOOG stock as of 3/29/2006 and figure out just how much money was traded in that SINGLE day. This will be to prove the "ridiculous" 2.6 trillion dollar/day through GOOG assertion I made up above...

Open: 379.9399
High: 399.00
Volume: 19,345,100

Volume represents hard number of shares trading hands; it does NOT count derivatives and derivatives are numbered in the quadrillions of dollars worldwide (up from a few million in 1995). Once banned in 1932 as the cause of the Great Depression, Alan Inflation Greenspan re-allowed them after the Russian derivative meltdown of 1995 threatened to explode worldwide commerce. The one requirement of the derivatives market are bubbles and there is ALWAYS a *huge* bubble to hinge the world's derivatives on; it's a doomed system, all they can do is grow it larger in successive waves, until finally, it will come crumbling down and virtually all paper money becomes worthless, worldwide. This could have happened in 95, instead we had the stockmarket bubble; then the housing bubble; then the gasoline bubble; then the GOOG bubble...

Volume * High + Volume * Low
= rough estimate of how much money traded hands in just official stock

7640927598 (high) + 7341658901 (low) / 2 = 7 491 293 250 dollars

Now, we're going to do the same w/ YHOO as of yesterday trading at $32.56: $829 719 255

But it gets worse when you consider volume / net income:
GOOG: 7 491 293 250 / 1 500 000 000 = 4.9994
YHOO: 829 719 255 / 1 900 000 000 = 0.437

OK look. What this means in real terms: 5 times more money is traded JUST IN STOCK BUYS/SELLS each day in GOOG than their entire yearly net profit. THAT is insane. If I were a GOOG employee who had my raises regulated to GOOG stock options (apparently they don't even own stocks they get a "goog coupon" to buy stocks over 4 years if their performance is good.), I'd be seriously stressing; and that would certainly hurt my job performance.

Yahoo is certainly a far wiser investment; altho there are even still far wiser investments hinted herein :-)

A crash?

Actually, I seriously doubt it will "crash"; that's what derivatives are for. Based upon the new evidence I see it easing down and the volume increasing. It'd probably take a few days for the brokerages to sell every thing as most of this is still done by hand and I assume the line to be quite long. And since derivatives aren't really influenced by market performance, it'll probably take a matter of months for it to get really bad.

I seriously doubt the Fed would let GOOG crash the more I think about it; it just represents wayyy too much of the U.S. financial sector atm. This is really a damage control situation now, I think (thus the S&P 500 move).

The thing to realize is that there is roughly 100 times more money invested in stock than their yearly net earnings and 20x their *gross* earnings. It's closest competitor in terms of services + earnings, Yhoo, is at 24x (net) and 9.2x (gross). 24x is *high* in most industries. Consider IBM: 18x (net) and 1.4x (gross). a more traditional sector, Walmart: 15x (net) and 0.64x (gross; or 1.5x more gross profit than stock).

(if you have shares now would be a good time to sell; well you need w/n 5 min of opening) cuz once goog sells those 2 billion ur stock's just going to devalue. Sell now at $400 and buy back at $250.

S&P 500

When a company makes the S&P 500, demand for the stock is on auto pilot as many fund managers are forced into buying it. Looks like GOOG is squeezing this thing for all it can, you must buy, we will dump more on you.

Ya gotta love these guys for creativity; "Google stock units" or GSUs are just a clever way to distribute stock within the company without writing it off against earnings, of course GOOG has never been a fan of SEC regs, they do what they want.

GSUs ...

Do no evil?! OK, so it's not against me but it seems SOOO EVIL! I'm just glad I've never read any thing official about them; perhaps it's all fabricated :-) One can certainly hope. (oops: )

GSUs are long-term contracts based on employee performance, which is always relative!
They range from 6 months to 5 years with the vast majority (90%) on 4 year contracts. What this means is that GOOG pledges to give each employee X shares over a 4 year period. If you're a bad employee, you get the shares on day 1461 (or the last day of 4 yrs) if you're good you can get virtually all within the first year. However, the stocks are for the price when they are given, not when the contract is signed.

HOPEFULLY these are not leverageable against debt. I can just see a GOOG employee using their estimated $600-by-2008 stock-they-dont-even-own as collateral on a million dollar house :-/ 2008 comes and GOOG has done a Lucent, they'd be soooooo screwed. I don't know how GSUs are supposed to work but I assume you can't "sell" your unowned stock promisory note as you could sell your lucent if you were an employee there.

Hurray for S&P 500!

I remember when S&P was forced to buy Lucent on 9/28/2000 and my dad was banging his fists on walls, literally, trying to sell his mutual fund and he just couldn't get it done in time because of some stupid timelimit or some thing.

HIs stock went something like this:

9/27 9/28 9/29 9/30 10/3 9/28/2001
$85 75 95 75 55 3

Wow GSUs are huge

I found a Wall Street Journal paper (sorry, it's premium subscription) back in 10 Dec 2005 that said that GOOG had issued 67 *million* GSUs in 2Q 2005... I'll just assume for lack of evidence that's all they have issued ever. Let's assume that by 2009 when the bulk of these 67M become due their stock is worth $150/share.

67 000 000 * 150 = 10 050 000 000 or 10 billion dollars.

But wait...GOOG makes 1.3 billion a year... and the entire online advertisement space is a 10 billion dollar market of which they already own 60% of. Hopefully the salary is good because the bonus seems non-existant.

Google is going to make big

Google is going to make big money handling financial transactions. There is growth in that angle.


67 *million* GSUs in 2Q 2005

So, they have already given away most of their earnings for the foreseeable future but they don't have to show that on the earnings reports because they are "GSUs". Thats special.

I smell a Spitzer on the way, an AG could have a blast with these guys.

Premium GMail

or just imagine they start charging $2 / month for every GMail account. One day you log in and Poof all your mail for years and years is now costing you money. I do not believe we actually signed a contract stating they're required to offer it for free and last time I checked it was their machine...

$2 * the millions of gmails is a lot of money but it would be seriously image-damaging so that would be the biggest disinsentive (along w/ lawsuits).

Goog has growth potential, i just haven't seen it; i just see free service after free service and more ads upon more ads in the SERPs. That's a flawed model that is pretty much maxed out; and for the first time ever AdSense won't be profitable due to YPN and adCenter.

Stock options and GOOG

have never gotten along, one way to eliminate that pesky law is to rename stock options to GSUs...cooool.

"The securities laws exist to ensure full disclosure to investors, including employees accepting stock options as compensation," Stephen M. Cutler, director of the SEC's enforcement division, said in a statement yesterday. "Companies cannot freely decide that they don't need to comply with the law."

goog and stock options

GOOG becomes Republican (wtf?)

A few days back GOOG announced it was hiring a Public Relations firm to bubble up its policies to Washington, D.C. One thing officially on the table is GOOG's opposition to a tiered Internet, which is probably bad for every one.

Who they hired is the shocker. The post says that $361,000 dollars was donated to political parties since 2001 by GOOG employees and $351,000 of that went to Democrats. So, who does GOOG hire for their PR work? Well, Newt Gringrich's secretary and another guy who was Tom Delay's personal PR junkie.

So if staff is leftist and PR firm is rightist, does that make the company moderate? ;D

Actually, i think a great many things in this thread deserve their own articles on TW, actually. GSU, republicn PR firm, amount of sway over the entire U.S. GDP and thus the world economy, out of control derivatives. These are all really huge imho.

Predictions unfolding

I predicted above high volume, stable price, as brokerages start to dump shares and S&P 500 ppl fill in the gaps... Daily volume is at 5.6 M at the first hour of trading with the avg daily volume being 12m. Put another way, 2 207 463 025.79 in play in 1 hour. (volume increased 100 000 000 while i was writing this post :O)

Companies cannot freely decide

Warren Buffett likes to tell the story of this gorgeous woman who slinks up to a CEO at a party and through moist lips purrs, "I’ll do anything - anything - you want. Just tell me what you would like." With no hesitation, he replies, "Reprice my options."

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