Latest InsideMicrosoft Posts: InsideGoogle: Sell Google? .comment-link {margin-left:.6em;}
Tuesday, October 26, 2004
Sell Google?
Steven Syre of the Boston Globe says that although only one of twenty stock analysts says to sell Google, he agrees with the guy. He reasons that Google is rising too high on overexuberant hype (which is true) and could fall dramatically (also true) for four reasons: Definetly, the "bubble fever" that has been going around is dangerous for Google. All this craziness over the stock can hurt the company badly. If Google's stock was based on what the company was worth, and not what it could be worth, the company would have more than enough money to be fine, but since the stock price is speculative, it runs major risks that can only hurt Google in the future. I'm rooting for the stock to stop rising. If the market cap goes above $65 billion before the next quarterly report (due in late January), then the stock is just pushing it, and in very dangerous territory. GOOG has made plenty of money. Time to slow it down and hope for stability.

"All this craziness over the stock can hurt the company badly...GOOG has made plenty of money. Time to slow it down and hope for stability."

These are obvius things but I feel they need to be reiterated... Google is not responsible for its stock price. The price is not determined by Google but by the buyers and sellers in the stock market. Google does not make or lose money when the stock is trading up or down. Google business is not affected by the price the traders are putting on the company. Google cannot do and should't do anything to manipulate its stock price simply becasue it doesn't matter to it. If the shareholders think that the price is too high, they are free to sell it. If they think it is too low, then again they are free to sell it. If someone wants to buy shares of Google but thinks the price is too high, then he or she can simply wait and eventually buy at lower prices. If the stock continues to go higher, then one's estimate of the stock price was wrong and if he or she still want to own it, they can buy it any time at the current market price.
I have to disagree. I think Google should concern itself with an overly expensive stock. I think if the market decides the price is too high and investors begin to bail, sending the price spiraling downwards, it can only hurt Google. Keep in mind that about a month ago, it was reported that 60% of Google's employees are now millionaires. Since then, that 60% has seen their value on paper almost double, and others have probably joined them. What's to say Google won't see a mass exodus of talent if the stock keeps rising at a meteoric pace?
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